Venture Capital Investment and the Post-IPO Performance of Entrepreneurial Firms: Evidence from the People's Republic of China | Zendy

Di Guo | Zendy; Kun Jiang | Zendy; Xiaoting Mai | Zendy

Open Access

Venture Capital Investment and the Post-IPO Performance of Entrepreneurial Firms: Evidence from the People's Republic of China

Author(s) -

Di Guo,

Kun Jiang,

Xiaoting Mai

Publication year - 2015

Publication title -

asian development review

Language(s) - English

Resource type - Journals

eISSN - 1996-7241

pISSN - 0116-1105

DOI - 10.1162/adev_a_00043

Subject(s) - initial public offering , venture capital , business , china , panel data , investment (military) , corporate governance , equity (law) , monetary economics , financial system , return on investment , return on equity , finance , economics , profitability index , macroeconomics , production (economics) , politics , political science , law , econometrics

We examine the effects of venture capital (VC) investment on the performance (measured by return on assets, return on equity, and Tobin's Q) and growth (measured by growth of total sales and total number of employees) of entrepreneurial firms in the People's Republic of China (PRC) after an initial public offering (IPO). Firm-level panel data analysis shows that VC investment contributes to the long-term performance and growth of entrepreneurial firms after an IPO. Meanwhile, we observe a significant and positive relationship between corporate governance of firms and VC investment. However, we do not find that experience or specialization of VC firms influences the effects of venture investment on post-IPO performance or growth of entrepreneurial firms in the PRC.

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