Impact of venture capital on total factor productivity: Insights from enterprise-investment institution factor flows

Xuxia Ma and Shanshan Zhu

Finance Research Letters, 2025, vol. 74, issue C

Abstract: From the vantage point of factor flows between enterprises and investment institutions, this paper undertakes an in-depth examination of data from China's listed companies spanning from 2016 to 2022, revealing that venture capital has played a pivotal role in substantially elevating enterprises' total factor productivity. Subsequent analyses underscore the particularly significant contributions of state-owned investment institutions and industrial investment entities in augmenting enterprises' total factor productivity. These findings imply that access to venture capital facilitates enterprises in augmenting R&D investments, bolstering their innovation capabilities, and thereby effectively fostering productivity advancements. This study underscores the beneficial effects of venture capital on enterprise development and offers valuable perspectives for refining investment structures and enhancing economic efficiency.

Keywords: Venture capital; Factor mobility; Total factor productivity (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:74:y:2025:i:c:s1544612325000479

DOI: 10.1016/j.frl.2025.106782

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