This paper compares the influence of different determinants of venture capital market in China, based on the cross-regional panel data from 2003 to 2008. The empirical results show that: (1) The government policy is the most important factor influencing venture capital market in China. Specifically, the government's direct capital support has a "Crowding Out" effect to the private capital, while the legitimization of the limited partnership in China promotes the development of venture capital market. (2) The region with more advanced private economy and more technological professionals would attract more venture capital. (3) Weak patent protection in China explains the negative impact of a larger number of patents to venture capital. (4) The stock market return is positively correlated with the size of the venture capital market, and at the same time the development of the SME board provides an effective exit to venture capital, which stimulates the development of the venture capital market. (5) Compared to the existing literature, we find a non significant effect of economic growth, credit market, R&D expenditures, IPO and high-tech industry cluster to the venture capital market. Policy suggestions are followed.
