The study aims to empirically study the effect of venture capital on open innovation of China's enterprises.
This paper selects China's A-share listed companies on the small and medium-sized enterprises (SMEs) board and the Growth Enterprise Market from 2014 to 2018 as research samples to empirically study the effect of venture capital on open innovation of China's enterprises.
The authors find that venture capital can significantly promote open innovation of enterprises. This promoting effect is more significant when the venture capital institutions have profounder industry experience, higher shareholding ratio and are syndicated. Further research finds that venture capital mainly promotes open innovation through three mechanisms: increasing monetary funds, improving absorptive capacity and strengthening executive incentives, and the effect of venture capital on open innovation is significantly different under the conditions of different regions, industries and property rights.
This paper not only reveals the effect of venture capital on enterprises' open innovation and the specific mechanism, but also provides empirical evidence for emerging economies to build a national innovation ecosystem and make use of capital markets to accelerate innovation strategies.
Funding: This study is part of the Project of Hunan Provincial Natural Science Foundation named Knowledge Management Practice and Open Innovation Performance of SMES in digital economy (2020JJ4592), Project of National Social and Scientific Fund Program named Research on the Structural Contradictions of China's Science and Technology System and its Reform Strategy and Path (18VSJ058) and Key Project of National Social and Scientific Fund Program named Research on Cost Sharing Mechanism and Effect of Technology Innovation (20AJY003). The start-up funding for Ph.D. scientific research of Huaibei Normal University of China (No. 03106098)
Yi, R., Wang, H., Lyu, B. and Xia, Q. (2021), "Does venture capital help to promote open innovation practice? Evidence from China", European Journal of Innovation Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/EJIM-03-2021-0161
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