Events

Professor Vincenzo Quadrini

Department of Finance and Business Economics

Marshall School

University of Southern California

We study how government venture capital (GVC) investment affects the financial and investment decisions of funded firms using firm-level data from a large commercial bank in China. We find that GVC funding is associated with higher bank borrowing and real investment for funded firms (crowding in rather than crowding out). We do not find the same results for private venture capital (PVC) investment. Another finding is that GVC investments spill over to firms that do not receive venture capital investment but are connected to the funded firms through their supply chain network.