IDEAS home Printed from https://ideas.repec.org/a/eee/ememar/v29y2016icp154-167.html
   My bibliography  Save this article

Policies of promoting entrepreneurship and Angel Investment: Evidence from China

Author

Listed:
  • Li, Changhong
  • Shi, Yulin
  • Wu, Cong
  • Wu, Zhenyu
  • Zheng, Li

Abstract

Using a sample of angel investments in China from 1994 to 2013, we examine effects of government policies that are favorable to start-ups on angel investment. Our findings show that positive effects of these policies on the amounts of angel investments are more significant in provinces with higher economic growth than those in provinces with lower economic growth. Policies that promote entrepreneurship affect the returns from high-amount angel investments more than those from low-amount ones. These findings indicate that such policies help to shape the new venture market in China and guide angel investors in making more efficient investments.

Suggested Citation

  • Li, Changhong & Shi, Yulin & Wu, Cong & Wu, Zhenyu & Zheng, Li, 2016. "Policies of promoting entrepreneurship and Angel Investment: Evidence from China," Emerging Markets Review, Elsevier, vol. 29(C), pages 154-167.
  • Handle: RePEc:eee:ememar:v:29:y:2016:i:c:p:154-167
    DOI: 10.1016/j.ememar.2016.08.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1566014116300590
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
    2. Yaokuang Li & Shuoyuan Jiang & Dan Long & Huidao Tang & Juan Wu, 2014. "An exploratory study of business angels in China: a research note," Venture Capital, Taylor & Francis Journals, vol. 16(1), pages 69-83, January.
    3. Lu, Jiangyong & Tao, Zhigang, 2010. "Determinants of entrepreneurial activities in China," Journal of Business Venturing, Elsevier, vol. 25(3), pages 261-273, May.
    4. Gunter W. Festel & Sven H. De Cleyn, 2013. "Founding angels as an emerging subtype of the angel investment model in high-tech businesses," Venture Capital, Taylor & Francis Journals, vol. 15(3), pages 261-282, July.
    5. Zhou, Wubiao, 2013. "Political connections and entrepreneurial investment: Evidence from China's transition economy," Journal of Business Venturing, Elsevier, vol. 28(2), pages 299-315.
    6. Shane, Scott, 2009. "Fool's Gold: The Truth Behind Angel Investing in America," OUP Catalogue, Oxford University Press, number 9780195331080.
    7. Liu, Feng-chao & Simon, Denis Fred & Sun, Yu-tao & Cao, Cong, 2011. "China's innovation policies: Evolution, institutional structure, and trajectory," Research Policy, Elsevier, vol. 40(7), pages 917-931, September.
    8. Wubiao Zhou, 2011. "Regional deregulation and entrepreneurial growth in China's transition economy," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 23(9-10), pages 853-876.
    9. Mihir Desai & Paul Gompers & Josh Lerner, 2003. "Institutions, Capital Constraints and Entrepreneurial Firm Dynamics: Evidence from Europe," NBER Working Papers 10165, National Bureau of Economic Research, Inc.
    10. Wu, Zhenyu & Chua, Jess H. & Chrisman, James J., 2007. "Effects of family ownership and management on small business equity financing," Journal of Business Venturing, Elsevier, vol. 22(6), pages 875-895, November.
    11. Ellen Farrell & Carole Howorth & Mike Wright, 2008. "A review of sampling and definitional issues in informal venture capital research," Venture Capital, Taylor & Francis Journals, vol. 10(4), pages 331-353, April.
    12. Josh Lerner, 2010. "The future of public efforts to boost entrepreneurship and venture capital," Small Business Economics, Springer, vol. 35(3), pages 255-264, October.
    13. Wai-Sum Siu, 2005. "An institutional analysis of marketing practices of small and medium-sized enterprises (SMEs) in China, Hong Kong and Taiwan," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 17(1), pages 65-88, January.
    14. Douglas Cumming & Uwe Walz, 2010. "Private equity returns and disclosure around the world," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(4), pages 727-754, May.
    15. Cumming, Douglas & Schmidt, Daniel & Walz, Uwe, 2010. "Legality and venture capital governance around the world," Journal of Business Venturing, Elsevier, vol. 25(1), pages 54-72, January.
    16. Sofia Avdeitchikova & Hans Landström & Nils Månsson-super-1, 2008. "What do we mean when we talk about business angels? Some reflections on definitions and sampling," Venture Capital, Taylor & Francis Journals, vol. 10(4), pages 371-394, July.
    17. Tan, Justin, 2001. "Innovation and risk-taking in a transitional economy: A comparative study of chinese managers and entrepreneurs," Journal of Business Venturing, Elsevier, vol. 16(4), pages 359-376, July.
    18. Cull, Robert & Xu, Lixin Colin, 2005. "Institutions, ownership, and finance: the determinants of profit reinvestment among Chinese firms," Journal of Financial Economics, Elsevier, vol. 77(1), pages 117-146, July.
    19. Liao, Woody M. & Lu, Chia-Chi & Wang, Hsuan, 2014. "Venture capital, corporate governance, and financial stability of IPO firms," Emerging Markets Review, Elsevier, vol. 18(C), pages 19-33.
    20. Maxwell, Andrew L. & Jeffrey, Scott A. & Lévesque, Moren, 2011. "Business angel early stage decision making," Journal of Business Venturing, Elsevier, vol. 26(2), pages 212-225, March.
    21. Michael A. Hitt & David Ahlstrom & M. Tina Dacin & Edward Levitas & Lilia Svobodina, 2004. "The Institutional Effects on Strategic Alliance Partner Selection in Transition Economies: China vs. Russia," Organization Science, INFORMS, vol. 15(2), pages 173-185, April.
    22. Mason, Colin M & Harrison, Richard T, 1995. "Closing the Regional Equity Capital Gap: The Role of Informal Venture Capital," Small Business Economics, Springer, vol. 7(2), pages 153-172, April.
    23. Jesper Lindgaard Christensen, 2011. "Should government support business angel networks? The tale of Danish business angels network," Venture Capital, Taylor & Francis Journals, vol. 13(4), pages 337-356, April.
    24. Rudy Aernoudt, 1999. "Business Angels: Should they fly on their own wings?," Venture Capital, Taylor & Francis Journals, vol. 1(2), pages 187-195, April.
    25. Juelin Yin & Yuli Zhang, 2012. "Institutional Dynamics and Corporate Social Responsibility (CSR) in an Emerging Country Context: Evidence from China," Journal of Business Ethics, Springer, vol. 111(2), pages 301-316, December.
    26. Roy, Abhik & Walters, Peter G. P. & Luk, Sherriff T. K., 2001. "Chinese puzzles and paradoxes: conducting business research in China," Journal of Business Research, Elsevier, vol. 52(2), pages 203-210, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cumming, Douglas & Zhang, Yelin, 2016. "Alternative investments in emerging markets: A review and new trends," Emerging Markets Review, Elsevier, vol. 29(C), pages 1-23.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ememar:v:29:y:2016:i:c:p:154-167. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/inca/620356 .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.