時空壓縮對風險資本決策的影響一一來自高鐵直連的證據

Abstract

Venture capitalists play an important role in a country’s innovative development and economic growth by investing in emerging companies with great potential. China’s venture capital industry started in 1985 when the Chinese central government promulgated the policy on the development of venture capital industry, and now has played an increasingly important role in the aspects of science and technology after more than 30 years. However, high information asymmetry and principal-agent problems in venture capital cause local preferences of venture capital decisions, which in turn leads to imbalanced development between regions. In recent years, the construction of high-speed rail in China has not only changed the way people travel, but also broken the boundaries between cities. Exploiting the exogenous shock brought by the introduction of high-speed rail (HSR) in China, this paper examines the impact of time-space compression effects on venture capitalists’ decisions.

This paper first explores the effect of time-space compression on venture capitalists’ investments. We reach the following conclusions: (1) Venture capitalists increase the amount per investment round and reduce the duration between rounds after the direct HSR connection between the city where the startup is located and the city where the venture capitalist is located. (2) This time-space compression effect is more pronounced when venture capitalists invest in low-market regions and emerging industries. (3) Furthermore, the time-space compression on venture capital decisions is only effective when the two locations are directly connected by high-speed rail rather than when the startup is located in a city opening a HSR station.

This paper further explores the effect of time-space compression on venture capitalists’ syndication. We find that: (1) The amount of co-investment is higher in syndication alliances among venture capitalists after the direct HSR connections between the cities they are located in. (2) The effect is more pronounced for venture capitalists with non-state backgrounds and co-investment in emerging industries, while it does not vary across regions with different marketization level.

The paper makes the following contributions: (1) This paper combines information asymmetry theory, principal-agent theory, and transaction cost theory to illustrate the impact of the time-space compression on venture capital investment and syndication decisions. (2) In terms of research data and research design, different from previous literature, we use detailed transaction-level data and focus on the direct high-speed rail connection between venture capitalists and startup firms. The research design helps us better rule out alternative explanations such as the local economic benefits of establishing high-speed stations, and precisely examine the impact of the space-time compression effect of HSR on the information asymmetry and agency problems in the investment relationship. (3) This paper uses a comprehensive method of normative analysis, empirical analysis, and questionnaire survey to analyze the impact of the time-space compression on venture capitalists.

Date of Award	13 May 2022
Original language	Chinese (Traditional)
Awarding Institution	City University of Hong Kong
Supervisor	Liu ZHENG (Supervisor)