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Topological properties and community detection of venture capital network: Evidence from China

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  • Jin, Yonghong
  • Zhang, Qi
  • Li, Sai-Ping

Abstract

Financial networks have been extensively studied as examples of real world complex networks. Based on the data from Chinese GEM and SME board, we establish a venture capital (VC) network to study the statistical properties, topological properties and community structure of the Chinese venture capital network. The result shows that there are no dominant venture capital firms in China which act as hubs in the VC network, and multi-company syndication is not popular in China, meaning that the relationships among venture capital companies are weak. The network is robust under either random or intentional attack, and possesses small world property. We also find from its community structure that, venture capital companies are more concentrated in developed districts but the links within the same district are scarce as compared to the links between different developed districts, indicating that venture capital companies are more willing to syndicate with companies in other developed districts. Furthermore, venture capital companies which invest in the same industry have closer relations within their communities than those which do not invest in the same industry.

Suggested Citation

  • Jin, Yonghong & Zhang, Qi & Li, Sai-Ping, 2016. "Topological properties and community detection of venture capital network: Evidence from China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 442(C), pages 300-311.
    • Handle: RePEc:eee:phsmap:v:442:y:2016:i:c:p:300-311
    DOI: 10.1016/j.physa.2015.09.029
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    References listed on IDEAS

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    1. Zhiyang Liu & Zhiqi Chen, 2014. "Venture Capital Networks and Investment Performance in China," Australian Economic Papers, Wiley Blackwell, vol. 53(1-2), pages 97-111, June.
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    4. Bygrave, William D., 1988. "The structure of the investment networks of venture capital firms," Journal of Business Venturing, Elsevier, vol. 3(2), pages 137-157.
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    6. Bruce Kogut & Pietro Urso & Gordon Walker, 2007. "Emergent Properties of a New Financial Market: American Venture Capital Syndication, 1960-2005," Management Science, INFORMS, vol. 53(7), pages 1181-1198, July.
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    Cited by:

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