The impact of venture capital funds with foreign limited partners investment on enterprise internationalization: evidence from China

Feng, Ting; Guo, Lihong; Dong, Jianwei; Wang, Han

doi:10.1016/j.heliyon.2022.e12281

Cited by 3 publications

(3 citation statements)

References 19 publications

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“…Normally, LPs were seen as pure financial investors with no influence on the fund's portfolio companies (Gompers and Lerner, 1996). Nevertheless, Feng et al (2022) indicated that the composition of LPs and their background can indeed have an impact on portfolio companies. We follow this assumption as well.…”

Section: Discussionmentioning

confidence: 99%

ESG consideration in venture capital: drivers, strategies and barriers

Lange,

Banadaki

2023

SEF

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Purpose There is an increasing awareness of environmental, social and governance (ESG) factors in the private equity (PE) environment. While many studies deal with the implementation of ESG in the field of PE, only little is known about how the subcategory venture capital. Therefore, this study aims to answer the questions: What are the motivations for venture capitalists to consider ESG in their investment decisions? How do they implement it and what are the barriers that hinder them? Design/methodology/approach An inductive study based on semi-structured interviews with 11 investors of venture capital firms (VCs) was conducted to explore the drivers, the barriers and the strategies to implement ESG in the investment decision-making. Findings All investors perceive that ESG will play a major role in investment decisions in the long term. VCs have seen benefits primarily in terms of performance and commercialization of startups that incorporate the ESG aspect. Limited partners are a driving force for change in this process. No standardized framework and lack of resources for implementation are mainly assumed as barriers. Practical implications Politics and industry might support particularly smaller VCs in their implementation by providing standardized frameworks. Owing to increasing awareness and interest of ESG criteria among VCs, startups should also address these criteria. Originality/value This paper contributes to the literature by examining how ESG is currently considered in VCs’ decisions and what challenges they face. Therefore, this research contributes to the understanding of the decision-making process among venture capitalists.

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Section: Discussionmentioning

confidence: 99%

ESG consideration in venture capital: drivers, strategies and barriers

Lange,

Banadaki

2023

SEF

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Section: Introductionmentioning

confidence: 97%

“…At the conclusion of their investigation into private equity performance, Kaplan and Schoar (2005) speculate that higher-performing VC firms benefit from LPs who provide value beyond mere financing. In a recent study conducted by Feng et al (2022), the likelihood of internationalization among enterprises is examined within a sample of local VC funds in China, focusing on LP perspective. The researchers discover compelling evidence indicating a substantial rise in the probability of overseas listing for portfolio companies with foreign LP investment compared to those with local LP investment alone.…”

Section: Introductionmentioning

confidence: 99%

Limited partners’ contribution to venture capital fund returns: newbies versus experienced

Abdou,

Gupta

2024

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PurposeThis study aims to investigate limited partners’ (LPs) influence on venture capital (VC) fund returns.Design/methodology/approachWe merge data from Preqin and SDC’s VentureXpert spanning from 1993 to 2014 and conduct multiple regression analysis to examine the influence of LPs on VC fund performance. Additionally, we conduct three distinct robustness tests to verify the credibility of our findings.FindingsOur empirical analysis demonstrates that newbie LPs consistently exert a significant positive influence on VC fund returns.Research limitations/implicationsVC and LP data is self-reported, and there is no comprehensive dataset as some LPs prefer to maintain anonymity.Originality/valueExtant literature on LPs’ contribution to VC fund performance is limited. The general assumption is that the role of LPs in VC fund performance is confined to funding. We introduce a new variable, LP track record, as a proxy for LP experience to examine if this variable influences VC performance.

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Venture capital, internationalization strategy and corporate innovation

Zheng,

Wang,

Zhang

2024

JBIM

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Purpose The purpose of this study is to explore the influence of venture capital participation on corporate innovation and to assess how internationalization strategies (including both the internationalization scope and speed) in mediating serve as intermediaries in the relationship between venture capital and corporate innovation. Design/methodology/approach Using hierarchical regression analysis, this research tests the hypothesized framework using survey data collected from 442 high-tech enterprises listed on the A-share markets in Shanghai and Shenzhen, China, spanning from 2010 to 2019. Findings The study reveals a non-linear (U-shaped) correlation between venture capital investment and innovation. This non-linear linkage is facilitated through the execution of enterprises’ strategies for international expansion. The primary finding suggests that venture capital participation positively influences the rapidity and extent of internationalization. Additionally, a U-shaped relationship is observed between corporate innovation and both the speed and scope of internationalization. Originality/value This document contributes insights into the micro-level mechanisms that explain the effects of venture capital and internationalization strategy on corporate innovation. The results offer multinational corporations practical guidance for executing their internationalization strategies effectively and fostering innovation.

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The impact of venture capital funds with foreign limited partners investment on enterprise internationalization: evidence from China

Cited by 3 publications

References 19 publications

ESG consideration in venture capital: drivers, strategies and barriers

ESG consideration in venture capital: drivers, strategies and barriers

Limited partners’ contribution to venture capital fund returns: newbies versus experienced

Venture capital, internationalization strategy and corporate innovation

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