, 1
7233 
17983Since the establishment of the first venture capital firm in mid-1980s, China’s venture capital industry has experienced a rapid growth, and is playing an increasingly important role in the innovation, entrepreneurship and economic development of China. By the end of 2012, China has become the second largest market for VC investments. Despite of a boom in venture capital in China during recent years, the understanding of this industry remains fragmented, without a clear understanding of how it differs from that in mature economies.This paper aims to provide a comprehensive literature review of venture capital research all across the world by identifying the following three important research steams: （1） venture capital and macro economy, which focuses on the interaction between venture capital and the macro environment, and how they shape each other; （2） venture capital firms and new ventures, which covers the whole process of venture capital investment decisions, including the selection of investees, post-investment management, exit strategies, performance implications, etc.; （3） venture capital firms themselves, which discusses how the characteristics of venture capital firms and their networks influence venture capital investment decisions and outcomes. Based on the broad review of extant research and a comparison between Chinese and Western contexts, we make several prospects for future research. First, we suggest a better understanding of venture capital firms’ activities embedded in the institutional environment of emerging economies such as China. Second, the complicated relationship between venture capital firms and new ventures is a promising but under-explored research topic, as the interaction between investors and entrepreneurs plays an important part in new ventures’ growth. Third, we call for more research attention to the influence of venture capitalists’ personal networks on venture capital firms’ decisions, as well as the interplay between interpersonal and interfirm networks in China’s venture capital industry.
/ Journals / Foreign Economics & Management
Foreign Economics & Management
LiZengquan, Editor-in-Chief
ZhengChunrong, Vice Executive Editor-in-Chief
YinHuifang HeXiaogang LiuJianguo, Vice Editor-in-Chief
Venture Capital Research: A Review and Prospects
Foreign Economics & Management Vol. 41, Issue 04, pp. 58 - 70,138 (2019) DOI:10.16538/j.cnki.fem.2019.04.005
Summary
References
Summary
[1] Chen S, He W L, Zhang R. Venture Capital and Firm Innovation: Effects and Underlying Mechanisms[J]. Management World, 2017,(1):158-169
[2] Dang X H, Dong J W,Wu Hong Chao. Venture Capital Firms’ Network Positions and Their Successful Exits: Empirical Evidence from China’s Venture Capital Industry[J]. Nankai Business Review, 2011,(2):82-91,101.
[3] Dong J, Wang L. Does Venture Capital Affect Strategic Choices of Startups? Literature Review and Theoretical Framework[J]. Foreign Economics & management, 2017,(2):36-46,59.
[4] Dong J, Zhai H Y, Wang J P. Management Partners of Venture Capital Institutes to Start-ups: From the Perspective of Industrial Expertise and Uncertainty[J]. Foreign Economics & management, 2014,(9):3-11.
[5] Long Y, Zhao H L, Zhang X D, et al. High-speed Railway and Venture Capital Investment[J]. Economic Research Journal, 2017,(4):195-208.
[6] Xie Y P, Song C L. Research Status Analysis of the Relationship between Venture Capital and Technological Innovation and Future Prospects[J]. Foreign Economics & management, 2017,(2):47-59.
[7] Zhang T S, Chen X Y, Huang J. Political Connection, Venture Capital and Firm Performance[J]. Nankai Business Review, 2015,(5):18-27.
[8] Zhang X R, Mao D W, Lu J Y. Foreign Venture Capital Firms in China: Investment Behaviors, Syndication, and Investment Performance[J]. Quarterly Journal of Management, 2017,(1):12-27.
[9] Aggarwal R, Kryscynski D, Singh H. Evaluating venture technical competence in venture capitalist investment decisions[J]. Management Science, 2015, 61(11): 2685-2706.
[10] Ball E, Chiu H H, Smith R. Can VCs time the market? An analysis of exit choice for venture-backed firms[J]. The Review of Financial Studies, 2011, 24(9): 3105-3138.
[11] Brander J A, Amit R, Antweiler W. Venture-capital syndication: Improved venture selection vs. the value-added hypothesis[J]. Journal of Economics & Management Strategy, 2002, 11(3): 423-452.
[12] Brass D J, Galaskiewicz J, Greve H R, et al. Taking stock of networks and organizations: A multilevel perspective[J]. The Academy of Management Journal, 2004, 47(6): 795-817.
[13] Bruton G D, Ahlstrom D. An institutional view of China's venture capital industry: Explaining the differences between China and the West[J]. Journal of Business Venturing, 2003, 18(2): 233-259.
[14] Cumming D, Knill A. Disclosure, venture capital and entrepreneurial spawning[J]. Journal of International Business Studies, 2012, 43(6): 563-590.
[15] Dai N, Nahata R. Cultural differences and cross-border venture capital syndication[J]. Journal of International Business Studies, 2016, 47(2): 140-169.
[16] Dimov D, Shepherd D A, Sutcliffe K M. Requisite expertise, firm reputation, and status in venture capital investment allocation decisions[J]. Journal of Business Venturing, 2007, 22(4): 481-502.
[17] Fitza M, Matusik S F, Mosakowski E. Do VCs matter? The importance of owners on performance variance in start‐up firms[J]. Strategic Management Journal, 2009, 30(4): 387-404.
[18] Franke N, Gruber M, Harhoff D, et al. Venture capitalists' evaluations of start‐up teams: Trade‐offs, knock‐out criteria, and the impact of VC experience[J]. Entrepreneurship Theory and Practice, 2008, 32(3): 459-483.
[19] Gerasymenko V, Arthurs J D. New insights into venture capitalists' activity: IPO and time-to-exit forecast as antecedents of their post-investment involvement[J]. Journal of Business Venturing, 2014, 29(3): 405-420.
[20] Gorman M, Sahlman W A. What do venture capitalists do?[J]. Journal of Business Venturing, 1989, 4(4): 231-248.
[21] Gu Q, Lu X H. Unraveling the mechanisms of reputation and alliance formation: A study of venture capital syndication in China[J]. Strategic Management Journal, 2014, 35(5): 739-750.
[22] Hellmann T, Puri M. The interaction between product market and financing strategy: The role of venture capital[J]. The Review of Financial Studies, 2000, 13(4): 959-984.
[23] Huang L, Knight A P. Resources and relationships in entrepreneurship: An exchange theory of the development and effects of the entrepreneur-investor relationship[J]. Academy of Management Review, 2017, 42(1): 80-102.
[24] Kaplan S N, Strömberg P. Venture capitalists as principals: Contracting, screening, and monitoring[J]. American Economic Review, 2001, 91(2): 426-430.
[25] Li Y, Chi T L. Venture capitalists' decision to withdraw: The role of portfolio configuration from a real options lens[J]. Strategic Management Journal, 2013, 34(11): 1351-1366.
[26] Li Y, Zahra S A. Formal institutions, culture, and venture capital activity: A cross-country analysis[J]. Journal of Business Venturing, 2012, 27(1): 95-111.
[27] Liu Y, Maula M. Local partnering in foreign ventures: Uncertainty, experiential learning, and syndication in cross-border venture capital investments[J]. Academy of Management Journal, 2016, 59(4): 1407-1429.
[28] Ma D L, Rhee M, Yang D Y. Power source mismatch and the effectiveness of interorganizational relations: The case of venture capital syndication[J]. Academy of Management Journal, 2013, 56(3): 711-734.
[29] Pahnke E C, McDonald R, Wang D, et al. Exposed: Venture capital, competitor ties, and entrepreneurial innovation[J]. Academy of Management Journal, 2015, 58(5): 1334-1360.
[30] Patzelt H, zu Knyphausen-Aufseß D, Fischer H T. Upper echelons and portfolio strategies of venture capital firms[J]. Journal of Business Venturing, 2009, 24(6): 558-572.
[31] Petkova A P, Wadhwa A, Yao X, et al. Reputation and decision making under ambiguity: A study of U.S. venture capital firms' investments in the emerging clean energy sector[J]. Academy of Management Journal, 2014, 57(2): 422-448.
[32] Puri M, Zarutskie R. On the life cycle dynamics of venture‐capital‐and non‐venture‐capital-financed firms[J]. The Journal of Finance, 2012, 67(6): 2247-2293.
[33] Sorenson O, Stuart T E. Bringing the context back in: Settings and the search for syndicate partners in venture capital investment networks[J]. Administrative Science Quarterly, 2008, 53(2): 266-294.
[34] Zarutskie R. The role of top management team human capital in venture capital markets: Evidence from first-time funds[J]. Journal of Business Venturing, 2010, 25(1): 155-172.
[35] Zhelyazkov P I, Gulati R. After the break-up: The relational and reputational consequences of withdrawals from venture capital syndicates[J]. Academy of Management Journal, 2016, 59(1): 277-301.
Cite this article
Zhang Xiru, Shen Rui, Lu Jiangyong. Venture Capital Research: A Review and Prospects[J]. Foreign Economics & Management, 2019, 41(4): 58-70.
Export Citations as:
For
ISSUE COVER
RELATED ARTICLES
