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The paper investigates factors to financing from venture capital (VC) in the Peer to Peer (P2P) lending industry of China. We focus on the signal effects of founder-CEOs, human capital, and legitimacy on venture capital investment. An important issue for entrepreneurship research is how to reduce t information asymmetry between entrepreneurs and potential investors. This paper builds on the signal theory to explain how new ventures can signal their qualities and promising businesses to potential investors to obtain external investment. By using a total of 2388 new ventures in China’s P2P lending industry, this paper analyzed the effects of factors on VC investment. We found that the founder-CEO status and the legitimacy of third-party signals are crucial to obtain the support of venture capital. We found that the CEO’s international experience has positively significant on VC financing, but the industry experience of CEOs is insignificant to get VC investment. The results indicate that new venture should pay more attention to build the ways of signaling and legitimacy of new venture to get external resource providers.
Hui Zheng; Xuexu Piao; Sangmoon Park. The Role of Founder-CEO, Human Capital and Legitimacy in Venture Capital Financing in China’s P2P Lending Industry. Sustainability 2021, 13, 1625 .
AMA StyleHui Zheng, Xuexu Piao, Sangmoon Park. The Role of Founder-CEO, Human Capital and Legitimacy in Venture Capital Financing in China’s P2P Lending Industry. Sustainability. 2021; 13 (4):1625.
Chicago/Turabian StyleHui Zheng; Xuexu Piao; Sangmoon Park. 2021. "The Role of Founder-CEO, Human Capital and Legitimacy in Venture Capital Financing in China’s P2P Lending Industry." Sustainability 13, no. 4: 1625.
New ventures play an important role in promoting regional economic growth, employment and innovative development. In China, the new business model centered on the sharing economy has grown rapidly in a short time, especially with regard to car-sharing, which has become one of the new governmental strategies to promote economic development in China. New car-sharing ventures have been recognized as the leading sector in sustainable development for the circular economy and resource reuse. This paper explores the regional determinants of new firm formation in the nascent car-sharing industry in China. We used panel data from 449 car-sharing new ventures established in 257 cities in China from 2011 to 2019 to conduct an empirical analysis. The findings show that the urbanization economy, human capital and venture capital in the region have a positive impact on the establishment of new ventures. At the same time, the regional population density, localization economy, innovation capacity and competitive environment have no significant relationships with the establishment of new car-sharing firms. This paper provides insights for startups entering the field of car-sharing and a theoretical basis for the subsequent research on startups in the sharing economy industry.
Yan Zhou; Sangmoon Park. The Regional Determinants of the New Venture Formation in China’s Car-Sharing Economy. Sustainability 2020, 13, 74 .
AMA StyleYan Zhou, Sangmoon Park. The Regional Determinants of the New Venture Formation in China’s Car-Sharing Economy. Sustainability. 2020; 13 (1):74.
Chicago/Turabian StyleYan Zhou; Sangmoon Park. 2020. "The Regional Determinants of the New Venture Formation in China’s Car-Sharing Economy." Sustainability 13, no. 1: 74.