Foundations and Trends® in Entrepreneurship > Vol 16 > Issue 1

Financing Entrepreneurship and Innovation in China

Lin William Cong, Cornell University, USA, will.cong@cornell.edu Charles M.C. Lee, Stanford University, USA, clee8@stanford.edu Yuanyu Qu, University of International Business and Economics, China, quyuanyu@uibe.edu.cn Tao Shen, Tsinghua University, China, shentao@sem.tsinghua.edu.cn
 
Suggested Citation
Lin William Cong, Charles M.C. Lee, Yuanyu Qu and Tao Shen (2020), "Financing Entrepreneurship and Innovation in China", Foundations and Trends® in Entrepreneurship: Vol. 16: No. 1, pp 1-64. http://dx.doi.org/10.1561/0300000095

Published: 07 Jan 2020
© 2020 Lin William Cong, Charles M.C. Lee, Yuanyu Qu and Tao Shen
 
Subjects
New business financing: Venture capital and private equity capital,  High technology: Technology-based new firms,  International business: International entrepreneurship, innovation and technology transfer
 

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In this article:
1. Introduction
2. The Economic Underpinnings of Entrepreneurial Finance
3. Financing Entrepreneurship in China
4. China’s Initial Public Offering (IPO) Policies
5. Summary
Acknowledgements
References

Abstract

This study reports on the current state-of-affairs in the funding of entrepreneurship and innovations in China and provides a broad survey of academic findings on the subject. We also discuss the implications of these findings for public policies governing the Chinese financial system, particularly regulations governing the initial public offering (IPO) process. We also identify and discuss promising areas for future research.

DOI:10.1561/0300000095
ISBN: 978-1-68083-598-4
76 pp. $60.00
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ISBN: 978-1-68083-599-1
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Table of contents:
1. Introduction
2. The Economic Underpinnings of Entrepreneurial Finance
3. Financing Entrepreneurship in China
4. China’s Initial Public Offering (IPO) Policies
5. Summary
Acknowledgements
References

Financing Entrepreneurship and Innovation in China

Financing Entrepreneurship and Innovation in China provides an overview of the current state-of-affairs in the financing of private innovations in China. While country-level innovation can take many forms, the focus is on the funding of business start-ups and entrepreneurial ventures. The monograph has four specific objectives: (1) to present an economic framework for evaluating the central challenges associated with the financing of entrepreneurial ventures in China, (2) to evaluate the relative size and importance of the channels through which private initiatives for innovation in China are currently being funded, (3) to survey the academic evidence on potential financing constraints currently facing private initiatives in innovation, and (4) to discuss public policy implications that may arise from these findings, as well as to outline the type of future research that may best inform Chinese policy makers. After the introduction, Section 2 begins with a review of the central economic themes in entrepreneurial finance. Section 3 reviews the channels through which external funding now reach entrepreneurs in China. Section 4 further explores the problems engendered by China’s IPO regulations. Section 5 summarizes the findings, discusses policy implications, and explores potential venues for future research. The authors conclude that China’s current IPO regulations represent a serious impediment to two important near-term goals espoused by the Chinese government – to bring more high-technology firms back to mainland stock markets, and to be included at a meaningful weight in international stock indices, particularly the MSCI Emerging Market Index.

 
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