IDEAS home Printed from https://ideas.repec.org/a/spt/admaec/v15y2025i2f15_2_9.html
   My bibliography  Save this article

How Can Taiwan's Venture Capital Industry Develop Ethical Decision-Making Mechanisms for Investing in Biotechnology Startups?

Author

Listed:
  • Tzu-Chun Sheng
  • Chiu-Ying Chang

Abstract

This study investigates the ethical challenges faced by Taiwan’s venture capital (VC) industry when investing in biotechnology companies and proposes mechanisms to address these issues. Using a literature review, case analysis, and expert interviews, the study identifies dilemmas such as information asymmetry, uncertainty, and conflicts of interest. Findings reveal that excessive pursuit of profits often leads VC firms to overlook social responsibilities, increasing ethical risks and harming industry reputation. To mitigate this, the study recommends that VC firms establish dedicated ethical committees to audit risks and provide guidance. It also suggests creating investment guidelines to define acceptable practices and integrating ethics, morality, and legal compliance education into the biotechnology sector. These recommendations aim to help Taiwan’s VC industry effectively address ethical challenges, enhance social responsibility, and support sustainable industry growth.  JEL classification numbers: G24, D70, O35.

Suggested Citation

  • Tzu-Chun Sheng & Chiu-Ying Chang, 2025. "How Can Taiwan's Venture Capital Industry Develop Ethical Decision-Making Mechanisms for Investing in Biotechnology Startups?," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 15(2), pages 1-9.
    • Handle: RePEc:spt:admaec:v:15:y:2025:i:2:f:15_2_9
    as

    Download full text from publisher

    File URL: http://www.scienpress.com/Upload/AMAE%2fVol%2015_2_9.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Dave Bouckenooghe & Asma Zafar & Usman Raja, 2015. "How Ethical Leadership Shapes Employees’ Job Performance: The Mediating Roles of Goal Congruence and Psychological Capital," Journal of Business Ethics, Springer, vol. 129(2), pages 251-264, June.
    2. Dinah Payne & Brenda Joyner, 2006. "Successful U.S. Entrepreneurs: Identifying Ethical Decision-making and Social Responsibility Behaviors," Journal of Business Ethics, Springer, vol. 65(3), pages 203-217, May.
    3. Gita Surie & Allan Ashley, 2008. "Integrating Pragmatism and Ethics in Entrepreneurial Leadership for Sustainable Value Creation," Journal of Business Ethics, Springer, vol. 81(1), pages 235-246, August.
    4. Harris, Jared D. & Sapienza, Harry J. & Bowie, Norman E., 2009. "Ethics and entrepreneurship," Journal of Business Venturing, Elsevier, vol. 24(5), pages 407-418, September.
    5. Matthew W. Rutherford & Paul F. Buller & J. Michael Stebbins, 2009. "Ethical Considerations of the Legitimacy Lie," Entrepreneurship Theory and Practice, , vol. 33(4), pages 949-964, July.
    6. Zahra, Shaker A. & Gedajlovic, Eric & Neubaum, Donald O. & Shulman, Joel M., 2009. "A typology of social entrepreneurs: Motives, search processes and ethical challenges," Journal of Business Venturing, Elsevier, vol. 24(5), pages 519-532, September.
    7. Jeng, Leslie A. & Wells, Philippe C., 2000. "The determinants of venture capital funding: evidence across countries," Journal of Corporate Finance, Elsevier, vol. 6(3), pages 241-289, September.
    8. 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.
    9. Bert Scholtens, 2006. "Finance as a Driver of Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 68(1), pages 19-33, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Harris, Jared D. & Sapienza, Harry J. & Bowie, Norman E., 2009. "Ethics and entrepreneurship," Journal of Business Venturing, Elsevier, vol. 24(5), pages 407-418, September.
    2. Vallaster, Christine & Kraus, Sascha & Merigó Lindahl, José M. & Nielsen, Annika, 2019. "Ethics and entrepreneurship: A bibliometric study and literature review," Journal of Business Research, Elsevier, vol. 99(C), pages 226-237.
    3. Pascal Dey & Chris Steyaert, 2016. "Rethinking the Space of Ethics in Social Entrepreneurship: Power, Subjectivity, and Practices of Freedom," Journal of Business Ethics, Springer, vol. 133(4), pages 627-641, February.
    4. Dong-Hong Zhu & Ya-Ping Chang, 2013. "Negative Publicity Effect of the Business Founder’s Unethical Behavior on Corporate Image: Evidence from China," Journal of Business Ethics, Springer, vol. 117(1), pages 111-121, September.
    5. Robin Stevens & Nathalie Moray & Johan Bruneel, 2015. "The Social and Economic Mission of Social Enterprises: Dimensions, Measurement, Validation, and Relation," Entrepreneurship Theory and Practice, , vol. 39(5), pages 1051-1082, September.
    6. Mataigne, Virginie & Meoli, Michele & Vanacker, Tom & Vismara, Silvio, 2025. "False signaling by platform team members and post-campaign venture outcomes: Evidence from an equity crowdfunding platform," Journal of Business Venturing, Elsevier, vol. 40(1).
    7. Virginia Simón-Moya & Lorenzo Revuelto-Taboada & Domingo Ribeiro-Soriano, 2012. "Are success and survival factors the same for social and business ventures?," Service Business, Springer;Pan-Pacific Business Association, vol. 6(2), pages 219-242, June.
    8. Guillaume Dumont, 2024. "Evaluating the Credibility of Entrepreneurs’ Impact Promises in Early-Stage Impact Investing," Entrepreneurship Theory and Practice, , vol. 48(6), pages 1525-1555, November.
    9. G. Lumpkin & Todd Moss & David Gras & Shoko Kato & Alejandro Amezcua, 2013. "Entrepreneurial processes in social contexts: how are they different, if at all?," Small Business Economics, Springer, vol. 40(3), pages 761-783, April.
    10. Hota, Pradeep Kumar & Bhatt, Babita & Qureshi, Israr, 2023. "Institutional work to navigate ethical dilemmas: Evidence from a social enterprise," Journal of Business Venturing, Elsevier, vol. 38(1).
    11. Epure, Mircea & Guasch, Martí, 2020. "Debt signaling and outside investors in early stage firms," Journal of Business Venturing, Elsevier, vol. 35(2).
    12. Elisabet Ferri & David Urbano, 2010. "Environmental Factors and Social Entrepreneurship," Working Papers 1003, Departament Empresa, Universitat Autònoma de Barcelona, revised Sep 2010.
    13. Marek Zinecker & Martina Skalicka & Adam P. Balcerzak & Michał Bernard Pietrzak, 2022. "Identifying the impact of external environment on business angel activity," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 83-105, December.
    14. Scuotto, V. & Le Loarne Lemaire, S. & Magni, D. & Maalaoui, A., 2022. "Extending knowledge-based view: Future trends of corporate social entrepreneurship to fight the gig economy challenges," Journal of Business Research, Elsevier, vol. 139(C), pages 1111-1122.
    15. Niculaescu, Corina-Elena & Sangiorgi, Ivan & Bell, Adrian R., 2023. "Venture capital financing in the eSports industry," Research in International Business and Finance, Elsevier, vol. 65(C).
    16. Elizabeth Chell & Laura J. Spence & Francesco Perrini & Jared D. Harris, 2016. "Social Entrepreneurship and Business Ethics: Does Social Equal Ethical?," Journal of Business Ethics, Springer, vol. 133(4), pages 619-625, February.
    17. David J. Scheaf & Matthew S. Wood, 2022. "Entrepreneurial Fraud: A Multidisciplinary Review and Synthesized Framework," Entrepreneurship Theory and Practice, , vol. 46(3), pages 607-642, May.
    18. Zahra Arasti & Hadi Zarei & Fatemeh Didehvar, 2015. "Identifying the Evaluative Indicators of Regulatory Policies for the Development of Social Entrepreneurship," Public Organization Review, Springer, vol. 15(3), pages 453-474, September.
    19. Patricia Crifo & Vanina Forget & Sabrina Teyssier, 2012. "The price of unsustainability: An experiment with professional private equity investors," Working Papers hal-00757203, HAL.
    20. Brett R. Smith & Geoffrey M. Kistruck & Benedetto Cannatelli, 2016. "The Impact of Moral Intensity and Desire for Control on Scaling Decisions in Social Entrepreneurship," Journal of Business Ethics, Springer, vol. 133(4), pages 677-689, February.

    More about this item

    Keywords

    Venture capital firms; Biotech start-ups; Ethical decision-making; Expert in-depth interviews.;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation

    Statistics

    Access and download statistics

    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:spt:admaec:v:15:y:2025:i:2:f:15_2_9. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eleftherios Spyromitros-Xioufis (email available below). General contact details of provider: http://www.scienpress.com/ .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.