Construction strategy of VCs firms portfolio from industrial organization perspective: empirical evidence from Mainland China

摘要

Using a proprietary dataset collected through a survey targeted to VC funds in Mainland China, we examine the impact of constructing VCs' firms portfolio from industrial organization perspective on investment efficiency, portfolio size and structure of profit sharing. The results indicate that constructing VCs' firms portfolio from industrial organization perspective improves investment efficiency because it reduces over investment and creates return for VC funds and entrepreneurial firms. Moreover, it also further explains the disparity of VCs portfolio size and structure of profit sharing between Mainland China and Europe and North America. Additional tests provide evidence to suggest that the government assistance to VC industry in Mainland China has obvious political objectives.