Government Venture Capital and Start-Up Innovation

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Abstract

This study examines the role of government venture capital (GVC) on start-up innovation in transition economies. We propose that GVC constitutes an important institutional endorsement mechanism for start-ups to gain external legitimacy and embeddedness in their resource environment to increase their innovation performance. Furthermore, we unearth the contingent value of GVC endorsement on start-ups' innovation by focusing on founders' political ties and prestige as distinct alternate sources of legitimacy and argue that the effect of GVC endorsement will be more pronounced for start-ups lacking in these founder attributes. Regression analyses using longitudinal data of 378 Chinese venture-backed biopharma start-ups from 2002-2017, along with a two-stage residual inclusion (2SRI) estimation method, offer broad support for our theory about the legitimating role of GVC.
Original languageEnglish
Title of host publicationGovernment Venture Capital and Start-Up Innovation
Publication statusPublished - 2021
EventThe Nexus of Business and Government in the Global Economy -
Duration: 11 Mar 202112 Mar 2021

Workshop

WorkshopThe Nexus of Business and Government in the Global Economy
Period11/03/2112/03/21

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