Do Better-Networked Venture Capital Firms Always Enjoy Higher Investment Performance? The Contingent Role of China's Institutional Changes

摘要

By combining the two perspectives of social networks and institutional theory, this article explores the influence of venture capital (VC) networks on investment performance against the background of China's institutional changes. This article uses the dynamic network analysis approach to conduct empirical research on 6498 investment events in China from 2008 to 2014. Although our results support previous studies regarding the higher investment performance of better-networked VCs, we further find that China's institutional changes have significant moderating effects on the above relationship. Specifically, in the early periods of change with high levels of voids in institutional environments, the reduction of institutional voids brought by institutional improvement decrease the likelihood of better-networked VCs achieving higher investment performance. However, when better institutions with fewer voids are built, the positive influence of VC networks will begin to increase as institutional voids are further reduced. The results are robust across different samples, econometric models, and measures of dependent variables and explanatory variables.