Is venture capital really a catalyst to commercialization? Evidence from China

摘要

Using a panel of China provincial areas from 2004–2008, we find that public research funding (R&D) and venture capital have a substitutive relationship in fostering the creation of new firms, and indirectly prove that it could spur innovation instead of public research funding. We also find that the positive relationship between public research funding (R&D) and the creation of new ventures. Our results remain robust to estimation with an instrument variable and lag structure in order to avoid the potential endogeneity issue. We believe that in short term venture capital do not have a complementary relationship in fostering start-ups.