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INCUBATOR ROLE OF FOREIGN VENTURE CAPITAL: EVIDENCE FROM OVERSEAS LISTING OF ENTERPRISES
ABSTRACT
This study uses the Granger-causality test and a sub-sample timevarying rolling window to explore the dynamic relationship between foreign venture capital (FVC) and overseas listing of Chinese enterprises (COLC), and takes into account the changes of legal environment and accounting standards. The results showed that from Q1 2012 to Q4 2014, the lower the FVC, the lower the COLC. From Q1 2008 to Q4 2008, the higher the FVC, the higher the COLC. Both positive and negative effects exist from COLC to FVC. Specifically, the more listed enterprises there are, the more foreign venture capitalists trust the potential of Chinese enterprises and the market. Thus, the corresponding FVC was high. Furthermore, the negative correlation between COLC and FVC was due to political factors and epidemics. Many enterprises improve their internationalization and profitability by attracting FVC to Chinese enterprises. Therefore, this study helps foreign investors achieve a greater return on investment in China and enables enterprises to improve their international reputations and realize overseas listings. In addition, the results can provide suggestions for the government to issue relevant measures conducive to maintaining the stability of the domestic market and the balanced development of domestic and foreign markets.
KEYWORDS
Overseas listing; foreign venture capital; rolling
window; dynamic relationship