A Chinese Perspective for Funding and Managing Knowledge

摘要

China has long recognized knowledge as the driver of productivity and economic growth, the foundation of which is the role of information, technology and learning in economic performance. China faces main challenges in transforming from a factor-based to a knowledge-based economy and one of these challenges is the need for a marketbased capital system for knowledge investment in order to "commercialize" knowledge for sustainable development. This paper explores the links between organisations and financial markets for capital formation in the knowledge sector from a Chinese perspective. This paper focuses on the equity capital market to understand as it is a crucial source of funding for many small and medium size enterprises (SMEs), which make up the bulk of many innovative knowledge firms and infers the economic imperatives that drive value for efficient capital allocation. This paper stimulates discussions on the financial market issues pertaining to the knowledge sector by outlining the major elements, both micro and systemic level features, necessary for planning and implementing a strategic financial program to ensure a better chance of success for the venture and promote a more efficient financial market. In achieving this, the market for equity investment in the knowledge sector will have an infrastructure that is responsive to investors' informational needs. It is from this understanding that the Chinese government and corporate players can contribute to build a financial infrastructure conducive for sustainable investment in the knowledge economy.