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Doctor of Philosophy, (Finance)
Study Completed: 2016
College of Business
Political Ties and Venture Capital: Evidence from China
Ms Wang investigated whether venture capital firms benefit from political ties, and whether these firms add value to China''spublic equity market by constraining earnings management and improving corporate governance of their portfolio firms. She found that political ties facilitate venture capital firms'' successful exits through Chinese mainland stock markets and merger and acquisition markets, which in turn boost returns for venture capital firms. Further dividing political ties into ownership- and management-level ties with the government, she found that venture capital firms with ownership-level ties are associated with portfolio firms with higher IPO-year earnings management, which is mainly due to venture capital firms'' immediate exit after the one-year lock-up restrictions. On the other hand, those with management-level ties are associated with portfolio firms with lower IPO-year earnings management regardless of lock-up sale. Lastly, Ms Wang showed that venture capital backed firms have boards with more independent directors.
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Last updated on Tuesday 04 April 2017