Corporate venture capital and state-owned enterprises’ innovation: a panel investigation on Chinese state-owned enterprises

Jinghao Yang, Jun Wen, Xinxin Zhao and Wenxin Gao

Science and Public Policy, 2025, vol. 52, issue 5, 653-665

Abstract: This study examines whether the state-owned enterprises (SOEs) engaged in corporate venture capital (CVC) exert a positive effect on innovation efficiency in China. We analyze this research topic using the venture capital data of 1,592 Chinese A-share listed state-owned enterprises from 2005 to 2020, and we observe a positive effect of CVC on the innovation efficiency pertaining to the investors of SOEs in China, which is optimized by acquiring the frontier innovation knowledge of start-ups, enhancing the efficiency of internal capital utilization in enterprises, and enhancing the governance environment. Furthermore, we observe that such a positive effect is more significant in SOEs with closer state-owned ties, stronger market power and lower proportion of enterprise benefit sharing. We further observe that the venture capital mainly increases the disruptive innovation rather than incremental innovation of the SOEs. Moreover, we observe that the innovation effect of CVC on private enterprises is mainly realized through the mechanism of acquiring innovation knowledge from startups, and the innovation promotion effect is less than that of SOEs.

Keywords: CVC investments; state-owned enterprises; enterprise innovation efficiency; knowledge acquisition; G24; G34 (search for similar items in EconPapers)
Date: 2025
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