| Summary: | This paper investigates the influence of venture capital on pre-IPO technological innovation in Chinese firms, combining theoretical and empirical analyses for analysis. In terms of indicators to measure the innovation capability of companies, this paper selects the proportion of R&D expenses to main business revenue and the proportion of R&D employees to total employees as indicators to measure innovation input, and selects the number of patents and software copyrights owned by enterprises before IPO as indicators to measure innovation output.
This paper investigates the influence of venture capital on pre-IPO technological innovation of Chinese firms in three aspects: venture capital participation, venture capital syndication, and foreign venture capital participation. The impact of financial leverage on pre-IPO technological innovation of Chinese firms with venture capital participation is also examined.
The results show that venture capital participation can significantly promote Chinese firms' innovation input and innovation output, and the promotion effect is more obvious in manufacturing firms; compared with individual investment, venture capital syndication can promote Chinese firms' innovation input and innovation output more; there is also a significant promotion effect of foreign venture capital on Chinese firms' technology innovation;The participation of venture capital alleviates the restraining effect of financial leverage on technological innovation, and financial leverage has a positive impact on R&D employee input and innovation output of Chinese enterprises with venture capital participation.
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