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Impact of venture capital on total factor productivity: Insights from enterprise-investment institution factor flows

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  • Ma, Xuxia
  • Zhu, Shanshan

Abstract

From the vantage point of factor flows between enterprises and investment institutions, this paper undertakes an in-depth examination of data from China's listed companies spanning from 2016 to 2022, revealing that venture capital has played a pivotal role in substantially elevating enterprises' total factor productivity. Subsequent analyses underscore the particularly significant contributions of state-owned investment institutions and industrial investment entities in augmenting enterprises' total factor productivity. These findings imply that access to venture capital facilitates enterprises in augmenting R&D investments, bolstering their innovation capabilities, and thereby effectively fostering productivity advancements. This study underscores the beneficial effects of venture capital on enterprise development and offers valuable perspectives for refining investment structures and enhancing economic efficiency.

Suggested Citation

  • Ma, Xuxia & Zhu, Shanshan, 2025. "Impact of venture capital on total factor productivity: Insights from enterprise-investment institution factor flows," Finance Research Letters, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finlet:v:74:y:2025:i:c:s1544612325000479
    DOI: 10.1016/j.frl.2025.106782
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    References listed on IDEAS

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    2. Ye, Xiaojie & Yang, Dan & Yu, Ling, 2025. "Does venture capitalists’ monitoring role have spillover effect? — Evidence from valuation adjustment mechanism in mergers and acquisitions," Finance Research Letters, Elsevier, vol. 82(C).
    3. Ma, Yanni & Qi, Chenyang, 2025. "Financial regulation, investment, and total factor productivity in enterprises," Finance Research Letters, Elsevier, vol. 85(PA).

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