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Venture capital risk in transitional economies : evidence from China

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Item Summary

Title: Venture capital risk in transitional economies : evidence from China
Authors: Chen, Charles Xiao Liang
Keywords: transitional economy
institutional risk
guanxi network
firm performance
Issue Date: Dec 2010
Publisher: [Honolulu] : [University of Hawaii at Manoa], [December 2010]
Abstract: In China, guanxi is a particular kind of interpersonal relationship or connection that serves as a form of social currency that can secure resources and benefits in business contexts. In the venture capital market in China, some have suggested that venture capitalists (VCs) use guanxi as a mechanism for addressing institutional risks. This study examines how VCs respond to institutional risks in China using appropriate guanxi networks, which in turn have a direct and indirect influence on VC investment performance. I propose an integrative framework that both delineates the direct effects of guanxi networks on firm performance and indicates how they are moderated by environmental turbulence and mediated by response capabilities, interlocking directorates varying in density and multiplicity, and syndications such as affiliated projects and affiliated funds. A group of 222 venture capital firms in China were surveyed. This study identifies a significant link between guanxi and VC firm performance but also demonstrates that this link is reduced by environmental turbulence. The mediators identified here also have a significant influence on the relationship between guanxi and VC performance.
Description: Ph.D. University of Hawaii at Manoa 2010.
Includes bibliographical references.
URI/DOI: http://hdl.handle.net/10125/101835
Appears in Collections:Ph.D. - International Management



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