When are ‘sharks’ beneficial? Corporate venture capital investment and startup innovation performance

The effect of corporate venture capital (CVC) investment on startup innovation performance has been examined in the extant literature. However, when this effect is enhanced is the important but relatively understudied question in strategy and entrepreneurship research. We build on the idea of regarding CVC investment relationships as learning alliances and introduce two situational factors as boundary conditions on the performance effect of CVC investment. In order to handle the endogeneity of CVC investment, we employ propensity score matching and differences-in-differences techniques. Based on the sample of startups in the human biotechnology industry in the United States, we find that CVC funding is beneficial for startup innovativeness when CVC investment is established after initial independent venture capital funding. Moreover, a startup’s patent stock before CVC funding also influences on that effect.     

The effects of China’s split-share reform on firms’ capital structure choice

China’s split-share structure reform in 2005–2006 mitigates agency conflicts between controlling shareholders and minority shareholders and thus may bring substantial changes to corporate financing behaviour. This article examines the impact of that reform on the capital structure decisions of firms by applying a variety of trade-off and pecking-order models. Using data from 1176 non-financial Chinese listed firms during the period 2000–2012, we present empirical evidence indicating that equity tracks the financing deficit better than debt in Chinese firms, a finding which is not consistent with pecking-order theory. This phenomenon is more prominent after 2006 as share reform increases trading activity in the secondary stock market and improves the transparency of financial markets. In addition, Chinese firms have an optimal leverage ratio and they adjust below-target leverage ratios faster than above-target leverage ratios after the implementation of share structure reform, although they make symmetric adjustments towards the target leverage ratio before 2007. Finally, recent share reform has prompted Chinese firms to more quickly address the divergence of actual leverage ratios from long-term target levels, but has slowed their response to short-term target leverage divergence.     

Quantifying the impacts of China’s currency depreciation and capital control: a CGE analysis

A dynamic global multi-regional computable general equilibrium (CGE) model is built to study the effects of Renminbi (RMB) depreciation and capital account liberalization. The simulation results suggest that although the depreciation of RMB can promote China’s trade surplus, it will nevertheless discourage domestic investment, consumption and lead to a decrease of real GDP.     

In search of parents’ knowledge for joint venture’s innovation

The purpose of this paper is to clarify the concept of dynamic capabilities from the knowledge-based perspective, including knowledge relatedness and knowledge learning, and to investigate the dynamic capabilities on innovation performance in joint venture. Negative binomial regression is used to test the hypotheses in a panel data of 183 joint venture cases. Significant relationships are found between dynamic capabilities and innovation performance. Moreover, the moderating roles of parent patents granted before, parent knowledge diversity and joint venture knowledge diversity are recognised and are hypothesised as positively moderating the effect of knowledge relatedness on innovation performance, but parent patents granted before and joint venture knowledge diversity are hypothesised as negatively tending to moderate the effect of knowledge learning on innovation performance. The findings support our prediction and policy implications are discussed.     

The innovation of China＇s farm products marketing

Aimed at the current actuality of farm products in China, the key point is the innovation of marketing if we want to share farm products market. This article discusses on four aspects： The innovation of both tactics and strategies of the farm products marketing; using the new marketing means, selling the products on Internet; improving the standard of the products, opening out the green products; the new sale mode. This article will give the active effect for the China＇s farm products market ing.     

The Time-varying Impact of China’s Economic Rebalancing on Korea’s Exports to China

While China seeks to shift from exports and investment to a consumption-oriented economy and to increase the self-sufficiency rate of exports, this study uses time-varying parameter vector autoregression (TVP-VAR) to examine the impact of economic structural changes in China on Korea’s exports to China over time. The study results suggest that the impact of China’s export shocks on Korea’s exports has weakened, which demonstrates the slowdown in regional production fragmentation, considering that Korea’s export goods are mainly intermediate goods. Instead, the influence of China’s domestic demand shock on Korea’s exports has expanded, which implies that China has increasingly become the final destination of intermediate goods made in Korea.     

How R&;D investments influence TFP growth: Evidence from China’s large and medium-sized industrial enterprises

This paper investigates the potential channels through which R&D may influence TFP growth using industry-level panel data of China’s large and medium-sized industrial enterprises over the period of 2000–2007. Comparing with existing literature, we provide a closer look of the relationship between R&D and TFP growth by decomposing TFP growth into efficiency change and technical change components using Malmquist productivity index and distinguishing between upstream R&D spillovers and downstream R&D spillovers. We find TFP grow slightly during 2000–2007, and R&D investment indeed serves as an engine of productivity growth just as endogenous growth theories argued, which is largely because R&D accelerates technical progress even it also results in enlarging technical inefficiency. However, we find a robust negative effect of downstream R&D spillovers on TFP growth, the effects of upstream is positive but not statistically significant. In addition, we do not find the positive effects of human capital on TFP as endogenous growth theories indicated, but find human capital severs as “assimilation device” for R&D spillovers both in promoting TFP growth and increasing technical efficiency even the effects on technical progress is adverse.     

Structural heterogeneity and proximity mechanism of China’s inter-regional innovation cooperation network

ABSTRACT

Based on the cooperation patent data between 31 provinces in China from 1985 to 2017, this paper portrays the topological structure, spatial pattern and proximity mechanism of China’s inter-regional innovation cooperation network by the graph theory, spatial statistical methods and the quadratic assignment procedure model. The conclusions are as follows: (1) the topological structure of China’s inter-regional innovation cooperation forms a hierarchical network with Beijing as the core and it exhibits a typical small-world property and ‘core–periphery’ structure. (2) In terms of spatial distribution characteristics, the ‘quadruple’ with the Beijing–Tianjin region, Yangtze River Delta, Pearl River Delta and Sichuan as the peaks has become the backbone of the inter-regional innovation cooperation network in China. At the same time, the spatial differentiation of the three indicators of degree centrality, median centrality and intensity centrality is obvious. (3) In terms of proximity mechanism, geographical, institutional and cognitive proximity exert a significant effect on China’s inter-regional innovation cooperation network linkage. However, there are significant differences in the effects of various proximity elements on China’s regional innovation network.     

The myth of China’s monetization

This article develops a simple model of M2/GDP based on the money demand function of Milton Friedman. This model proves that M2/GDP is positively related to the expected wealth and negatively related to the opportunity costs of holding money. China’s extremely high monetization ratio as measured by M2/GDP is the result of a decades-long rapid economic growth and a depressed financial system. Fast economic growth leads to high expected wealth. A depressed financial system leads to low opportunity costs of holding money. The combination of those two factors increases money demand and leads to very high M2/GDP. The model is verified indirectly by testing two implied testable hypothesizes. The study of this article raises questions on the accuracy of M2/GDP as a measure of monetization.     

China’s efforts to contain Renminbi’s depreciation and the relating impacts

China began to face Renminbi (RMB) depreciation pressure since 2014Q2, and the 8/11 reform in 2015 exacerbated the RMB depreciation pressure against USD. To contain the depreciation pressure, the People’s Bank of China (PBC) adopted three methods. Firstly, PBC tried to stabilize the exchange rate by selling USD and purchasing RMB, which resulted in the fast shrinking of China’s foreign exchange reserve. Secondly, PBC strengthened the regulation of capital outflows, which caused the stagnation of RMB internationalization. Thirdly, PBC frequently changed the pricing mechanism of the daily fixing of RMB to USD, which led to the reverse of the liberalization of RMB exchange rate. Under the new environment of RMB depreciation pressure and much lower foreign exchange reserve, Chinese government changed its strategies and became more cautious and pragmatic in outward foreign direct investment, RMB internationalization, and Belt & Road Initiative construction.     

The influence of entrepreneur’s personal characteristics on MSEs growth through innovation

Research in the separate areas of innovation and growth has considerably intensified in recent years. However, little scholarly attention has been paid to the entrepreneurs’ personal characteristics that might explain the growth of micro and small enterprises (MSEs) through innovation. This study examines the key entrepreneurs’ personal characteristics affecting micro and small enterprises (MSEs) upgrading, defined here as substantial growth through innovation. Six major determining types of entrepreneurs’ characteristics were identified from the innovation and the growth literature: education, work experience, gender, motivations, nationality and age. The empirical results which are based on t-tests of the differences between upgraders and non-upgraders, the linear probability model and the logit model, all suggest that work experience and motivations are cornerstones in the likelihood that an MSE will upgrade. The policy implications of this study on promoting MSEs upgrading are also discussed.     

The potential impact of China–US BIT on China’s manufacturing sectors

This article finds that the overall effect of the foreign direct investment (FDI) and thereby the China–US bilateral investment treaties (BIT) on Chinese manufacturing sector is positive, which raises the productivity and profitability of the firms, using various econometric models and other evidence. The manufacturing sector as a whole has already opened up to the world economy and needs to continue this process. The industries in the manufacturing sector do not need to be protected, except for in limited fields related to national security, scarce natural resources and well-defined strategic sectors. Gradual lifting of the protection may be needed in the short-run for a small number of vulnerable sectors. A moderate relaxing of the current restrictions will increase FDI in manufacturing from all countries by 4–8% under different assumptions. This effect will be small when only considering FDI from the USA. Domestic firms need to update their technology, reduce costs and learn management skills from their foreign competitors, while using the national treatment terms in BIT to enter the fields that are not open to domestic firms under current regulations. Domestic firms also need to set up firm-level global strategies and reallocate firms’ resources according to the changing investment environment, taking advantage of profit opportunities outside the domestic markets.     

The effect of sample size on European Union’s renewable energy investment drivers

Macroeconomic modelling results based on relatively varying sample sizes may lead to incoherent results. Such effects have not been adequately understood in the renewable energy literature regarding the European Union (EU). This study focuses on the comparison of results obtained for renewable energy investment drivers (for solar and wind energy investments) on different samples of EU countries, including all EU-27, former EU-15 and 11 high renewable investment EU countries. The study used a random effect panel data modelling approach over the period 1995–2011 for studying the impact of the levelized cost, regulation perception, carbon emissions and climatic condition on wind and solar investments over the three samples. The results demonstrate the importance of trustable regulation schemes to ensure that regulation will not have a significant negative effect on investment, showing also the need to further extend the model to include support schemes as fundamental drivers for investment.     

The impact of coal price fluctuations on China’s economic output

Due to the important role of coal in China’s macroeconomic growth, the price of coal significantly influences its economic output. Employing a VAR model, a cointegration test and a state-space model of time-varying variables, this article analyses the influence of coal price fluctuations on the volume and structure of China’s economic output, including both the strength and the time delay of such influence. This article further explores the corresponding relationships between coal price fluctuations and variations in the effects of these fluctuations to analyse the asymmetric influence of coal price fluctuations on China’s macroeconomy. Coal price fluctuations exerted significant long-term positive effects and short-term negative effects on China’s output variables, with an average delay of 11 months; they had positive effects on investment and consumption over the long term and an increasingly negative effect on imports and exports. The average delays were 9 months for investment, 6.5 months for consumption and 10 months for imports and exports. There was an asymmetric correlation between coal price fluctuations and the time-varying elasticity of their impact on GDP. The results in this study are consistent with the actual operating circumstances of the Chinese economy.     

The effect of communication and energy services reform on manufacturing firms’ innovation

Upstream services liberalization improves the efficiency and cost of communication and energy services, reducing the marginal costs of downstream manufacturing firms through input-output linkages. This study explores one possible mechanism behind this finding: innovation. I investigate the effects of communication and energy services reform in India in the mid-1990s on downstream manufacturing firms’ decisions to invest in R&D. The empirical analysis uses manufacturing-firm level data and regulation indicators in the communications and energy service sectors. The liberalization of services in India had a positive effect on manufacturing-firm innovation. These results are concentrated on firms in the middle of the initial productivity distribution. The main channel is the elimination of entry barriers into the communication sector.     

The impacts of education investment on skilled–unskilled wage inequality and economic development in developing countries

Four-sector general equilibrium models are established to investigate the impacts of increased governmental investment in education capital on skilled–unskilled wage inequality and economic development. The basic model, which assumes perfect competition in the producer services sector, shows that increased education capital investment from the government will unambiguously reduce skilled–unskilled wage inequality and conditionally promote economic development. Then the robustness of the basic model is substantiated by the extended model that incorporates the monopolistically competitive feature of the producer services sector.     

Australia’s foreign investment review board and the regulation of Chinese investment

Foreign investment has played an important role in the Australian economy since the country’s foundation. Part of the latest wave of foreign direct investment (FDI) in Australia has been by Chinese firms, and largely by state-owned enterprises with connections to the Chinese state. Despite the value it has generated for the Australian economy, Chinese FDI has been controversial and has exposed some of the shortcomings in Australia’s foreign investment review process. This article evaluates Australia’s foreign investment regime, and pays particular attention to the Foreign Investment Review Board (FIRB). Questions are asked about how closely the FIRB’s role and processes resemble regulatory best practice. The article also considers whether greater fidelity by the FIRB to principles of good governance could better serve Australia’s broad policy interests and reduce Chinese perceptions of an opaque and discriminatory foreign investment regime.     

Entrepreneur’s creativity and firm-level innovation performance: bricolage as a mediator

Prior literature focuses on the direct influence of entrepreneur’s creativity on firm-level innovation performance, but it ignores the intermediate mechanism of how. This study examines the role of bricolage in mediating the relationship between entrepreneur’s creativity and innovation performance. We propose that in SMEs, entrepreneur’s creativity can facilitate bricolage, which in turn influences innovation performance. Furthermore, the extent to which entrepreneur’s creativity can influence bricolage depends on firm age. Survey data from 249 SMEs indicate that bricolage functions as a mediator in the relationship between entrepreneur’s creativity and innovation performance. Entrepreneur’s creativity has a stronger effect on bricolage for young firms than for old firms.     

Firms’ human capital, R&D and innovation: a study on French firms

This article investigates the effects of human capital and technological capital on innovation. While the role of technological capital as measured by research and development (R&D) expenditure has been intensively investigated, few studies have been made on the effect of employee training on innovation. This article explores the relationship between innovation and firm employee training. Our methodological approach contributes to the literature in three ways. We propose various indicators of firm employee training. We build a count data panel with a long time-data series to deal with the issue of firms?? heterogeneity. We propose a dynamic analysis. Using dynamic count data models on French industrial firms over the period 1986?C1992, we find positive and significant effects of R&D intensity and training on patenting activity. Whatever the indicators of training our results show that the firm employee training has a positive impact on technological innovation.     

China’s value-added tax reform,firm behavior and performance

China reformed value-added tax (VAT) by removing investment from the tax base in northeastern provinces in 2004, which is a “natural experiment” of its tax system. Using difference-in-differences method, this paper for the first time investigates the impact of VAT reform on China firms’ fixed asset investment, employment behavior, innovative activities, and productivity, and furthermore discusses the impact of firm behavior on industrial structural upgrade and employment with a firm-level panel data of large and medium-sized manufacturing enterprises in China. We find that VAT reform significantly promotes firms’ fixed asset investment, and increases firms’ capital-labor ratio and productivity; while enhancement of firms’ productivity is mainly achieved by means of substituting labor with capital, rather than independent technology innovation; meanwhile, VAT reform distinctly decreases employment. Our findings have essential policy implications on the extension of VAT reform in the entire China.