The paper "The Role of Foreign and Domestic Venture Capital in Innovation: Evidence from China", co-authored by Professor Xueyong ZHANG of the School of Finance and his doctoral student, Jiangjing QUE, was recently published in "Accounting & Finance" which is one of the SSCI journals.
Abstract: This paper analyses the different effects of foreign venture capital (FVC) and domestic venture capital (DVC) on innovation for IPOs. Using patent counts to measure innovation, the results indicate that FVC‐backed firms are less innovative than DVC‐backed firms. Our findings are robust after controlling for the sample selection bias using a propensity score matching approach. One possible underlying mechanism through which FVCs nurture less innovation is their inferior geographic proximity to investment targets.
Keywords: Venture; capital; Innovation; Geographic; proximity; R&D