A world away from venture capital funds: biotechnology and finance in Shanghai

Richard, Brian; Malone, Ken; Hales, Brent D.; Turkopuls, Markus A.

doi:10.1504/ijte.2009.027546

Cited by 2 publications

(2 citation statements)

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“…These observations lead us to the main argument of this present paper. On the basis of our own interviews, we suggest a link between the findings of Frew et al (2008) as well as Richard et al (2009) and China's cluster development through the establishment of firm subsidiaries. If local governments are the major suppliers of venture capital, then it may be rational to establish companies in multiple locations in order to collect more funds.…”

Section: Jstpc 32mentioning

confidence: 79%

“…Moreover, the initial impetus for venture capital provision came from the Chinese Government at national and particularly local levels, while private domestic and foreign firms were only allowed to enter the market since the late 1990s (White et al, 2005). The findings of Richard et al (2009) mirror the important role of local governments in new venture financing. According to their survey of Shanghai companies, new biotech firms are established with funds from founders and their friends and family and/or the local government.…”

Section: Business Strategies In China's Health Biotech Sectormentioning

confidence: 99%

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Anatomy of cluster development in China: the case of Health Biotech Clusters

Conlé

Taube²

2012

Journal of Science and Technology Policy in China

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des Rechteinhabers aufgrund einer (DFG geförderten) Allianz-bzw. Nationallizenz frei zugänglich. / This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively. EmpfohleneDesign/methodology/approach -The paper employs a demographic approach that is inspired by the 2006 work of Romanelli and Feldman on cluster development in the USA. It categorizes China's clusters based on differences in the degree of policy support and the nature of the science base. Then, it draws a sample of 75 of China's most visible firms and analyses them in terms of entrepreneurial origin, their location and, if applicable, the location of their subsidiaries. By matching types of firms with types of clusters, the paper highlights some characteristics of China's regional development. Findings -Studies on China's high-tech agglomerations unanimously complain about a lack of "creative buzz" compared to the vibrant clusters of for example, the Bay Area in the USA. The analysis indicates that the lack of a creative culture is associated with the anatomy of cluster development. China's clusters grow to a significant extent by attracting enterprise subsidiaries to their sites. The authors argue that these particular cluster anatomies are founded on China's capital market. As the capital market is not prepared to provide pre-revenue firms with sufficient funds, firms have to earn revenue quickly in order to ensure their viability. Therefore, they concentrate on building up manufacturing capacity and exploiting given technologies. The main point is that local governments as major providers of financial support are instrumental in this process. The establishment of manufacturing subsidiaries in various locations rests on the rationale of collecting funds. This leads to the conclusion that national capital markets either reinforce or inhibit clustering depending on how much it allows the mobility of financial capital. Local government funds do not travel far. This has an impact on the firms' localization decisions and their business strategies, which, in turn, affects the "culture" inside the clusters.Research limitations/implications -This argument is based on a limited number of interviews conducted by the authors or other researchers. In order to corroborate the link between the capital market and local development trajectories, more evidence needs to be collected via interview surveys and other means to extract financial information. Originality/value -Unlike other research on Chinese clusters, this paper offers an interregional perspective based on a demographic approach. The argument is original in linking regional cluster dynamics with the national institutional set-up.

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Section: Jstpc 32mentioning

confidence: 79%

Section: Business Strategies In China's Health Biotech Sectormentioning

confidence: 99%