Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry

Zeqi Wang; Ke Gao; Jingjing Yang

doi:doi:10.11648/j.ijefm.20241202.16

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| Peer-Reviewed

Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry

Zeqi Wang^*

, Ke Gao

, Jingjing Yang^*

Published in International Journal of Economics, Finance and Management Sciences (Volume 12, Issue 2)

Received: 19 March 2024 Accepted: 27 April 2024 Published: 29 April 2024

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Abstract

Can government venture capital (GVC) change the investment choice of private venture capital (PVC) to fulfill its political mission? Most of the previous literatures on GVC and PVC focus on the post venture capital (VC), while there are few studies on the impact of GVC on PVC before venture capital investment. This phenomenon is more obvious in previous studies with China as the research background. Based on the background of China's semiconductor industry, which is strongly supported by the Chinese government, this paper studies whether GVC can affect the investment niche and venture capital investment mode of PVC. Through empirical analysis of the VC data of semiconductor industry in Anhui, Beijing, Jiangsu and Guangdong provinces from 2012 to 2022, I found that in the semiconductor venture capital market of the above four provinces and cities, GVC effectively played a role of leverage and effectively attracted PVC to invest in the semiconductor industry. And as the number of semiconductor GVC data as a percentage of all semiconductor VC data continues to decline year after year, PVC is more inclined to invest in semiconductor R&D firms, and more inclined to invest the firms whose location has served as a target region for government semiconductor related guided funds, and the investment form of PVC is more inclined to syndicate investment with government venture capitalists. It can be said that GVC has effectively influenced the investment decisions of PVC and fulfilled its political mission of promoting the independence of technology and production in China's semiconductor industry.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 12, Issue 2)
DOI	10.11648/j.ijefm.20241202.16
Page(s)	113-126
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Government Venture Capital, Private Venture Capital, China Semiconductor Industry

References

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APA Style

Wang, Z., Gao, K., Yang, J. (2024). Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry. International Journal of Economics, Finance and Management Sciences, 12(2), 113-126. https://doi.org/10.11648/j.ijefm.20241202.16

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ACS Style

Wang, Z.; Gao, K.; Yang, J. Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry. Int. J. Econ. Finance Manag. Sci. 2024, 12(2), 113-126. doi: 10.11648/j.ijefm.20241202.16

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AMA Style

Wang Z, Gao K, Yang J. Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry. Int J Econ Finance Manag Sci. 2024;12(2):113-126. doi: 10.11648/j.ijefm.20241202.16

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@article{10.11648/j.ijefm.20241202.16,
  author = {Zeqi Wang and Ke Gao and Jingjing Yang},
  title = {Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry
},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {12},
  number = {2},
  pages = {113-126},
  doi = {10.11648/j.ijefm.20241202.16},
  url = {https://doi.org/10.11648/j.ijefm.20241202.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20241202.16},
  abstract = {Can government venture capital (GVC) change the investment choice of private venture capital (PVC) to fulfill its political mission? Most of the previous literatures on GVC and PVC focus on the post venture capital (VC), while there are few studies on the impact of GVC on PVC before venture capital investment. This phenomenon is more obvious in previous studies with China as the research background. Based on the background of China's semiconductor industry, which is strongly supported by the Chinese government, this paper studies whether GVC can affect the investment niche and venture capital investment mode of PVC. Through empirical analysis of the VC data of semiconductor industry in Anhui, Beijing, Jiangsu and Guangdong provinces from 2012 to 2022, I found that in the semiconductor venture capital market of the above four provinces and cities, GVC effectively played a role of leverage and effectively attracted PVC to invest in the semiconductor industry. And as the number of semiconductor GVC data as a percentage of all semiconductor VC data continues to decline year after year, PVC is more inclined to invest in semiconductor R&D firms, and more inclined to invest the firms whose location has served as a target region for government semiconductor related guided funds, and the investment form of PVC is more inclined to syndicate investment with government venture capitalists. It can be said that GVC has effectively influenced the investment decisions of PVC and fulfilled its political mission of promoting the independence of technology and production in China's semiconductor industry.
},
 year = {2024}
}

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TY  - JOUR
T1  - Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry

AU  - Zeqi Wang
AU  - Ke Gao
AU  - Jingjing Yang
Y1  - 2024/04/29
PY  - 2024
N1  - https://doi.org/10.11648/j.ijefm.20241202.16
DO  - 10.11648/j.ijefm.20241202.16
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 113
EP  - 126
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20241202.16
AB  - Can government venture capital (GVC) change the investment choice of private venture capital (PVC) to fulfill its political mission? Most of the previous literatures on GVC and PVC focus on the post venture capital (VC), while there are few studies on the impact of GVC on PVC before venture capital investment. This phenomenon is more obvious in previous studies with China as the research background. Based on the background of China's semiconductor industry, which is strongly supported by the Chinese government, this paper studies whether GVC can affect the investment niche and venture capital investment mode of PVC. Through empirical analysis of the VC data of semiconductor industry in Anhui, Beijing, Jiangsu and Guangdong provinces from 2012 to 2022, I found that in the semiconductor venture capital market of the above four provinces and cities, GVC effectively played a role of leverage and effectively attracted PVC to invest in the semiconductor industry. And as the number of semiconductor GVC data as a percentage of all semiconductor VC data continues to decline year after year, PVC is more inclined to invest in semiconductor R&D firms, and more inclined to invest the firms whose location has served as a target region for government semiconductor related guided funds, and the investment form of PVC is more inclined to syndicate investment with government venture capitalists. It can be said that GVC has effectively influenced the investment decisions of PVC and fulfilled its political mission of promoting the independence of technology and production in China's semiconductor industry.

VL  - 12
IS  - 2
ER  -

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Author Information

Zeqi Wang

International Business School Suzhou, Xi'an Jiaotong-Liverpool University, Suzhou, China

Contact Email

http://orcid.org/0009-0000-7831-7866
Ke Gao

Guanghua School of Management, Peking University, Beijing, China

Contact Email

http://orcid.org/0009-0001-1719-3350
Jingjing Yang

School of International Relations, Hanyang University, Seoul, South Korea

Contact Email

http://orcid.org/0009-0006-3165-317X

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APA Style

Wang, Z., Gao, K., Yang, J. (2024). Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry. International Journal of Economics, Finance and Management Sciences, 12(2), 113-126. https://doi.org/10.11648/j.ijefm.20241202.16

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ACS Style

Wang, Z.; Gao, K.; Yang, J. Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry. Int. J. Econ. Finance Manag. Sci. 2024, 12(2), 113-126. doi: 10.11648/j.ijefm.20241202.16

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AMA Style

Wang Z, Gao K, Yang J. Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry. Int J Econ Finance Manag Sci. 2024;12(2):113-126. doi: 10.11648/j.ijefm.20241202.16

Copy | Download

@article{10.11648/j.ijefm.20241202.16,
  author = {Zeqi Wang and Ke Gao and Jingjing Yang},
  title = {Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry
},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {12},
  number = {2},
  pages = {113-126},
  doi = {10.11648/j.ijefm.20241202.16},
  url = {https://doi.org/10.11648/j.ijefm.20241202.16},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20241202.16},
  abstract = {Can government venture capital (GVC) change the investment choice of private venture capital (PVC) to fulfill its political mission? Most of the previous literatures on GVC and PVC focus on the post venture capital (VC), while there are few studies on the impact of GVC on PVC before venture capital investment. This phenomenon is more obvious in previous studies with China as the research background. Based on the background of China's semiconductor industry, which is strongly supported by the Chinese government, this paper studies whether GVC can affect the investment niche and venture capital investment mode of PVC. Through empirical analysis of the VC data of semiconductor industry in Anhui, Beijing, Jiangsu and Guangdong provinces from 2012 to 2022, I found that in the semiconductor venture capital market of the above four provinces and cities, GVC effectively played a role of leverage and effectively attracted PVC to invest in the semiconductor industry. And as the number of semiconductor GVC data as a percentage of all semiconductor VC data continues to decline year after year, PVC is more inclined to invest in semiconductor R&D firms, and more inclined to invest the firms whose location has served as a target region for government semiconductor related guided funds, and the investment form of PVC is more inclined to syndicate investment with government venture capitalists. It can be said that GVC has effectively influenced the investment decisions of PVC and fulfilled its political mission of promoting the independence of technology and production in China's semiconductor industry.
},
 year = {2024}
}

Copy | Download

TY  - JOUR
T1  - Exploring the Impact of Government Venture Capital (GVC) on Private Venture Capital (PVC) Investment Choices in China's Semiconductor Industry

AU  - Zeqi Wang
AU  - Ke Gao
AU  - Jingjing Yang
Y1  - 2024/04/29
PY  - 2024
N1  - https://doi.org/10.11648/j.ijefm.20241202.16
DO  - 10.11648/j.ijefm.20241202.16
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 113
EP  - 126
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20241202.16
AB  - Can government venture capital (GVC) change the investment choice of private venture capital (PVC) to fulfill its political mission? Most of the previous literatures on GVC and PVC focus on the post venture capital (VC), while there are few studies on the impact of GVC on PVC before venture capital investment. This phenomenon is more obvious in previous studies with China as the research background. Based on the background of China's semiconductor industry, which is strongly supported by the Chinese government, this paper studies whether GVC can affect the investment niche and venture capital investment mode of PVC. Through empirical analysis of the VC data of semiconductor industry in Anhui, Beijing, Jiangsu and Guangdong provinces from 2012 to 2022, I found that in the semiconductor venture capital market of the above four provinces and cities, GVC effectively played a role of leverage and effectively attracted PVC to invest in the semiconductor industry. And as the number of semiconductor GVC data as a percentage of all semiconductor VC data continues to decline year after year, PVC is more inclined to invest in semiconductor R&D firms, and more inclined to invest the firms whose location has served as a target region for government semiconductor related guided funds, and the investment form of PVC is more inclined to syndicate investment with government venture capitalists. It can be said that GVC has effectively influenced the investment decisions of PVC and fulfilled its political mission of promoting the independence of technology and production in China's semiconductor industry.

VL  - 12
IS  - 2
ER  -

Copy | Download