Title: What factors determine PE/VC investment decision in China? An empirical study

Authors: Xubo Zhang; Yanbin Tu; Ke Zhong

Addresses: School of Economics and Management, Wuhan Polytechnic University, 68 South Xuefu Road, Changqing Garden Wuhan, Hubei, China ' School of Business, Robert Morris University, Moon Township, PA 15108, USA ' College of Business, Central Washington University, Lynnwood, WA 98036 USA

Abstract: In this study, we investigate the factors that potentially impact PE/VC investment decisions in China during 2002 to 2012. We find that regional economic policy, regional resource condition, targeted enterprise's management and marketing capacity, and withdrawal expectation are the factors that substantially determine PE/VC investment decisions in China. The findings suggest that local governments could play an important role in promoting PE/VC investments. They also suggest that the targeted enterprise can attract PE/VC investments by building a solid management team and boosting its marketing capacity. The withdrawal expectation plays an important role in PE/VC investment decision making as both an independent and an intermediate variable. A high withdrawal expectation rate stimulates more PE/VC investments. Joint efforts of regional government, targeted enterprises, and PE/VC investment firms can help to build a promising withdrawal prospect.

Keywords: PE/VC investment; regional economic policy; regional resource; enterprise's management; market capacity; PE/VC withdrawal expectation.

DOI: 10.1504/IJBEM.2019.105262

International Journal of Business and Emerging Markets, 2019 Vol.11 No.4, pp.398 - 416

Received: 30 Mar 2019
Accepted: 25 Jul 2019
Published online: 22 Feb 2020 *

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