TITLE:
Does VC Spur Regional Innovation?
AUTHORS:
Shun Zhang, Lining Dong
KEYWORDS:
VC, Regional Innovation, Innovation Efficiency
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.4 No.4,
April
26,
2016
ABSTRACT: Studies of domestic and foreign scholars found that technological innovation is one of the key driving forces for economic growth. Venture capital (VC) had a new investment mechanism accompanied by the emergence technological innovation, and invested in a unique way and in a special operation mode, which determined the effective promotion of technological innovation. In this paper, the effect of VC on technological innovation was examined in two perspectives—“capital- increase effect” and “innovation propensity-increase effect”. Chinese provincial unbalanced panel data from 2009 to 2013 were gathered to verify the two effects above. And we also explored how VC affected regional innovation and its mechanism. The results showed that VC had a positive role in regional innovation promoting, and “capital-increase effect” can be verified. VC was to produce more innovations while reducing blind innovation input so as to improve innovation efficiency. The “innovation propensity-increase effect” can be verified.