Political ties and VC exits: Evidence from China

Hamish Anderson, Jing Chi and Wang, Qing (Sophie)

China Economic Review, 2017, vol. 44, issue C, 48-66

Abstract: We examine whether political ties (PTs) benefit VCs in China and find a positive relationship between PTs and successful VC exits. Our findings indicate that PTs are crucial for VCs to exit via Chinese mainland stock markets and M&As. The impact of PTs depends on the nature and compositions of PTs. We document that VCs with management-level PTs enjoy greater success than those with ownership-level PTs, whereas no significant difference between central and local government PTs on VC exits. Our results remain stable after controlling for selection bias, alternative measures for VC exits, and legal and institutional differences across regions.

Keywords: Venture capital exits; Political ties; Institutions; Transitional economy; China (search for similar items in EconPapers)
JEL-codes: G24 G28 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:44:y:2017:i:c:p:48-66

DOI: 10.1016/j.chieco.2017.03.007

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