Empirical Study of the Impacts of Venture Capital on the Ability of Technological Innovation-based on Panel Data of China's Provinces

Venture capital plays an important role in the establishment of national innovation system. This paper examined the relationship between China's venture capital and the capabilities of scientific and technological innovation, based on the research samples from 21 provinces, municipalities and regions, through panel data and simultaneous equation model. Research showed that with its fast development over the past years, China's venture capital has exerted great influences on local scientific and technological innovation which could be improved significantly in the current and later short-term periods. However, the investment is still mainly focuses on the maturity stage projects; it hardly improves the current independent R&D activities in a direct manner.