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.
|Title of host publication||Government Venture Capital and Start-Up Innovation|
|Publication status||Published - 2021|
|Event||The Nexus of Business and Government in the Global Economy - |
Duration: 11 Mar 2021 → 12 Mar 2021
|Workshop||The Nexus of Business and Government in the Global Economy|
|Period||11/03/21 → 12/03/21|