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Venture Capital and Dividend Policy

Author

Listed:
  • Yi Tan

    (Antai Collge of Economics & Management, Shanghai Jiaotong University, 1954 Huashan Road, Shanghai 200030, China)

  • Xiaoli Wang

    (School of Management, Marist College, Poughkeepsie, NY 12601, USA)

  • Xiaoyu Fu

    (Antai Collge of Economics & Management, Shanghai Jiaotong University, 1954 Huashan Road, Shanghai 200030, China)

Abstract

In this paper, we empirically examine the impact of venture capital investment on the dividend policy of the invested companies using a sample of list companies from China’s ChiNext market during the period 2014 to 2019. Our empirical results show that different types of VC investments have different impacts on the dividend policies of the invested companies. To be specific, we found independent venture capital companies (IVCs) promote the company’s dividend payment and increase the level of dividend payments while corporate venture capital (CVC) inhibits the company’s dividend payment. The joint participation of multiple types of venture capital investment (syndication) also increases the company’s dividend distribution. Our main contributions are two-fold. First, we provide a comprehensive analysis in the field of VC and dividend policy; second, we differentiate VC from the perspective of investment objectives and examine its different impacts on the dividend policies of the invested companies.

Suggested Citation

  • Yi Tan & Xiaoli Wang & Xiaoyu Fu, 2024. "Venture Capital and Dividend Policy," IJFS, MDPI, vol. 12(1), pages 1-17, March.
    • Handle: RePEc:gam:jijfss:v:12:y:2024:i:1:p:27-:d:1359914
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    References listed on IDEAS

    as
    1. Fodil Adjaoud & Walid Ben‐Amar, 2010. "Corporate Governance and Dividend Policy: Shareholders’ Protection or Expropriation?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(5‐6), pages 648-667, June.
    2. Gorman, Michael & Sahlman, William A., 1989. "What do venture capitalists do?," Journal of Business Venturing, Elsevier, vol. 4(4), pages 231-248, July.
    3. von Eije, Henk & Megginson, William L., 2008. "Dividends and share repurchases in the European Union," Journal of Financial Economics, Elsevier, vol. 89(2), pages 347-374, August.
    4. Fodil Adjaoud & Walid Ben-Amar, 2010. "Corporate Governance and Dividend Policy: Shareholders' Protection or Expropriation?," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(5-6), pages 648-667.
    5. Jihye Jeong & Juhee Kim & Hanei Son & Dae-il Nam, 2020. "The Role of Venture Capital Investment in Startups’ Sustainable Growth and Performance: Focusing on Absorptive Capacity and Venture Capitalists’ Reputation," Sustainability, MDPI, vol. 12(8), pages 1-13, April.
    Full references (including those not matched with items on IDEAS)

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