Inter-regional capital flow is a form of carrier to optimize the allocation of resources among regions and promote the coordinated development of regions. With the further improvement of China’s capital market, cross-regional M&A has become a means for enterprises to obtain scarce or useful resources, expand business scope, enhance competitiveness, and become bigger and stronger in regional diversification. It is also an important thrust to promote the inter-regional flow of resources and stock capital and coordinated development among regions. However, there is still a lack of research to identify the mechanism of the impact of modern financial entities on inter-regional capital flow by promoting the real economy.
From the perspective of cross-regional M&A, this paper studies the impact of venture capital support on inter-regional capital flow. It is found that the improvement of venture capital participation promotes invested enterprises to expand the scale of cross-regional M&A. However, the promotion effect of venture capital on cross-regional capital flow is more likely to occur in the situation that all venture capital shareholders are not major shareholders, in the situation that the leading venture capital is non-state-owned property rights, and in the situation of syndication venture capital. The impact of venture capital intervention on inter-regional capital flow is more significant in the counter-current M&A situation that enterprises in less developed areas merge enterprises in developed areas. The participation of venture capital also breaks the geographical distance barrier, and stimulates invested enterprises to expand the investment scale in the long-distance cross-regional M&A. In addition, the increase of the equity concentration of enterprise management inhibits the promotion of venture capital participation on the scale of cross-regional M&A, and the increase of CEO tenure strengthens the role of venture capital participation in promoting the scale of cross-regional M&A.
This paper provides micro evidence for venture capital to promote inter-regional capital flow, and enriches the research on the impact of venture capital on regional economy. It finds that there is an impact of investment behavior and strategic learning between venture capital and invested enterprises. As active investors, the participation degree of venture capital will also affect the investment behavior of invested enterprises, so as to drive the inter-regional capital flow. This study enriches the organizational strategy theory from the perspective of strategic learning. The conclusion provides the empirical evidence that venture capital promotes inter-regional capital flow, which has a certain reference value for optimizing the decision-making of cross-regional M&A and promoting the coordinated development of regional economy.