This paper examines the effects of Chinese venture capital (VC)’s final exit on their portfolio companies. We find that, compared to other early investors, VCs achieve significantly higher returns from their exit of the portfolio companies. We use the presence of VC directors and the introduction of high-speed rail to address identification concerns. Announcements manipulation and earnings management are plausible channels through which VCs achieve higher returns when they exit from the companies. VCs’ exit negatively influences their portfolio companies’ long-term performance. Our paper sheds new light on the value creation role played by VCs and discovers a previously ignored adverse effect of VCs – the exploitation of their portfolio companies.
Cheng Cheng ;
Xuan Tian ;
Shenggang Yang ;
Every sweet has its sour: Venture Capitals’ impact on the portfolio companies at the final exit （2022年10月01日）http://www.cfrn.com.cn//lw/gsjr/fxtzlw/69e12eb98be64da6aa2a89365ad00454.htm