Venture Capital and Dividend Policy

Yi Tan, Xiaoli Wang () and Xiaoyu Fu
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Yi Tan: Antai Collge of Economics & Management, Shanghai Jiaotong University, 1954 Huashan Road, Shanghai 200030, China
Xiaoli Wang: School of Management, Marist College, Poughkeepsie, NY 12601, USA
Xiaoyu Fu: Antai Collge of Economics & Management, Shanghai Jiaotong University, 1954 Huashan Road, Shanghai 200030, China

IJFS, 2024, vol. 12, issue 1, 1-17

Abstract: In this paper, we empirically examine the impact of venture capital investment on the dividend policy of the invested companies using a sample of list companies from China’s ChiNext market during the period 2014 to 2019. Our empirical results show that different types of VC investments have different impacts on the dividend policies of the invested companies. To be specific, we found independent venture capital companies (IVCs) promote the company’s dividend payment and increase the level of dividend payments while corporate venture capital (CVC) inhibits the company’s dividend payment. The joint participation of multiple types of venture capital investment (syndication) also increases the company’s dividend distribution. Our main contributions are two-fold. First, we provide a comprehensive analysis in the field of VC and dividend policy; second, we differentiate VC from the perspective of investment objectives and examine its different impacts on the dividend policies of the invested companies.

Keywords: venture capital; independent venture capital; corporate venture capital; dividend policy (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2024
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