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Cohesiveness or competitiveness: Venture capital syndication networks and firms' performance in China

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  • Yang, Song
  • Li, Yuanqin
  • Wang, Xingzhou

Abstract

We use a time-sequence dataset of 837 Venture Capital Firms in China to investigate how the social network characteristics of these VC firms affect their performance. We identified three network positional features: degree centrality, Eigen-value centrality, and efficiency that hypothetically are consequential to a VC firm's performance. Our data analysis reveals that network efficiency is a significant but negative determinant of a VC firm's performance – the network inefficiency, measured by the extent to which the alter firms of an ego firm are connected with each other boosts the ego firm's performance. We discuss such findings by contextualizing them in the unique institutional environment and emerging market of China.

Suggested Citation

  • Yang, Song & Li, Yuanqin & Wang, Xingzhou, 2018. "Cohesiveness or competitiveness: Venture capital syndication networks and firms' performance in China," Journal of Business Research, Elsevier, vol. 91(C), pages 295-303.
    • Handle: RePEc:eee:jbrese:v:91:y:2018:i:c:p:295-303
    DOI: 10.1016/j.jbusres.2018.07.006
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    References listed on IDEAS

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    Cited by:

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    4. Huiling Zhang & Yaokuang Li & Juan Wu & Li Ling, 2022. "How do the network structures of lead investors affect the following of distant strangers? Evidence from Chinese equity crowdfunding," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 3516-3533, December.
    5. TIAN, Xiaoli & KOU, Gang & ZHANG, Weike, 2020. "Geographic distance, venture capital and technological performance: Evidence from Chinese enterprises," Technological Forecasting and Social Change, Elsevier, vol. 158(C).
    6. Nikiforou, Argyro Iro & Lioukas, Spyros & Voudouris, Irini, 2020. "Network structure and firm-level entrepreneurial behavior: The role of market and technological knowledge networks," Journal of Business Research, Elsevier, vol. 106(C), pages 129-138.
    7. Gu, Jing & Zhang, Fujuan & Xu, Xun & Xue, Chaokai, 2023. "Stay or switch? The impact of venture capitalists' movement across network communities on enterprises’ innovation performance," Technovation, Elsevier, vol. 125(C).
    8. Chen Zhang & Xinghua Dang & Tao Peng & Chaokai Xue, 2019. "Dynamic Evolution of Venture Capital Network in Clean Energy Industries Based on STERGM," Sustainability, MDPI, vol. 11(22), pages 1-25, November.
    9. Cailou, Jiang & DeHai, Liu, 2022. "Does venture capital stimulate the innovation of China's new energy enterprises?," Energy, Elsevier, vol. 244(PA).

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