Digital economy development and venture capital networks: Empirical evidence from China

Jinjin Hu, Dong Huo and Delin Wu

Technological Forecasting and Social Change, 2024, vol. 203, issue C

Abstract: This paper examines the impact of digital economy on urban venture capital (VC) networks constructed from 44,122 inter-city VC events involving 285 cities in China from 2011 to 2019. Specifically, digital infrastructure, digital industry development, digital innovation capacity and digital inclusive finance are identified as four critical dimensions of digital economy. Further, panel regressions reveal that digital economy plays a pivotal role in facilitating the flow of VC resources, and thus positively influencing the agglomeration, radiation, and intermediation of cities embedded in the inter-city VC networks. Further, the results show heterogeneity in the focal impact of digital economy. First, it is stronger in central cities. Second, it follows an inverted-U shape, with the maximum effect observed at approximately 550 km distance between start-ups and investment centers. Third, digital economy has a stronger impact at the seed and start-up stages than at the expansion and maturity stages. These findings have implications for policy-making concerning the development of digital economy and the strategic planning of urban VC networks.

Keywords: Digital economy; VC networks; Technology innovation; Geographic distance (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:203:y:2024:i:c:s0040162524001343

DOI: 10.1016/j.techfore.2024.123338

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