NDLI: How law, politics and transnational networks affect technology entrepreneurship: Explaining divergent venture capital investing strategies in China

Content Provider	Springer Nature Link
Author	Fuller, Douglas B.
Copyright Year	2009
Abstract	This article identifies three distinct patterns of investment behavior by venture capital firms investing in technology sector start-ups in China. The first pattern is the service-oriented, technology-light investment behavior exhibited by the foreign venture capitalist firms not founded by ethnic Chinese. The second pattern is the technology creation investment pattern exhibited by foreign firms founded by ethnic Chinese and embedded in ethnic Chinese communities. The third pattern consists of local state-funded Chinese venture capital firms that choose either to invest in state-directed projects or opt out of investing in technology start-ups entirely. What explains the differences in behavior between the strictly foreign and the ethnic Chinese-embedded foreign firms are the different legal environments in which these firms honed their skills. The different learned experience gained from operating in different environments explains why the foreign firms avoid investing in technology-generating activities in China whereas the ethnic Chinese firms are willing to do so despite China’s notorious weak intellectual property rights regime. The political factors influencing the distribution of finance in China explain the behavior and essential failure of the local state-run venture capital firms. These findings demonstrate that several distinct, separate and non-clashing institutional arrangements are concurrently operating within China and shaping the behavior of venture capital firms there.
Starting Page	445
Ending Page	459
Page Count	15
File Format	PDF
ISSN	02174561
Journal	Asia Pacific Journal of Management
Volume Number	27
Issue Number	3
e-ISSN	15729958
Language	English
Publisher	Springer US
Publisher Date	2009-06-04
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	China Venture capital Technology Technology development Rule of law Political economy Business/Management Science Management/Business for Professionals
Content Type	Text
Resource Type	Article
Subject	Business and International Management Economics, Econometrics and Finance Strategy and Management

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4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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