Government Role in China’s Venture Capital(2006年公共管理国际会议论文).docVIP

Government Role in China’s Venture Capital 1.Mannie Manhong Liu 2.LI Zhao-hui 3.ZHU Li-qun 1.2.School of Finance Renmin University of China, Beijing, P.R.China, 1008723.North China Institute of Science and Technology Beijing, P.R.China, 100016 Abstract An increasing volume of research has done investigating western government’s role in venture capital industry. Yet very little has been contributing to the examining of government role in China’s venture capital. This paper is to examine the action Chinese government had taken and the main obstacles to China’s domestic venture capital industry. Chinese government had played an important role in the creation of domestic venture capital industry. But there still exit some obstacles to the development of China’s venture capital such as lacking flexible exit channels and industry laws and high quality management team. To further promote the development of venture capital in China, government should play a more active role in developing capital market, perfecting economy-operating environment, cultivating comprehensive human resources and encouraging them to involving in the management of venture capital. Key words Venture Capital, Government Role, Obstacles 1 Introduction Venture capital plays an important role in motivating innovation and creating employment for offering necessary funds and management advices to small high technology companies that have been regarded as important sources of innovation and growth (Bottazzi, Laura, and Marco Da Rin (2002)). While economies depend increasingly on innovation and venturing to realize a maintainable growth, countries in the world try to replicate America’s successful experience to develop venture capital (Megginson, William (2004)). Generally, policy makers implement three types of measures to nurture venture capital industry, which are enlarging venture funding sources, improving expected return rate of investment and deducing venture capital firms’ running cost (Marco