Through four rounds of total coverage survey on VC funds in Mainland China , we received 41 VC fund samples. This paper, we empirically test the relation among the size (number) of VC fund portfolios, entrepreneurs’ (enterprise management teams’) profit shares and exogenous factors and find: (1) the portfolio size of a VC fund significantly varies non-monotonically with entrepreneurs’ profit shares, the number of venture firms is first increasing when entrepreneurs’ profit share is low and then decreasing when it is high; (2) entrepreneurs’ profit share is significantly positive related with the number of venture firms in a VC fund; (3) the government-sponsored VCs invest more venture firms but retain less profit shares .

本文研究风险投资机构背景对于投资策略、公司IPO 抑价、股票市场回报率以及公 司治理的影响。研究发现：相对于政府和民营背景风险投资机构，外资背景和混合型背景风 险投资机构会采取更加谨慎的投资策略；从所投资的公司来看，相对于政府背景风险投资支 持的公司，外资和混合型背景风险投资支持的公司IPO 抑价率较低，股票市场异常回报率 较高，民营背景投资的与政府背景投资的无显著差异，而且只要有外资背景参与投资的公司 相对于那些没有外资背景参与投资的公司IPO 抑价率更低，回报率更高；从公司治理的角 度来看，外资背景风险投资参与支持的公司有较大的董事会规模、较低的大股东持股比例和 较高比例的专业化董事。

We examine how a firm designs capital allocation and managerial compensation schemes to motivate a privately informed manager to (i) engage in innovative activity to search for, and (ii) guide the firm to invest in, a new investment project. We show that relative to the first-best, the firm allocates too little capital and provides too few incentives for the manager to expend innovative effort; the manager may violate the NPV rule by investing the allocated capital in a project with negative productivity. We provide several novel predictions that help identify firms that are likely to innovate and managers who are likely to follow the NPV rule. We also show that uncertainty and incentive pay can be positively related.

The relationship between capital structure and product market competition is recently a new research field and hot topic in the study of capital structure. Focuses on Chinese state-controlled and private listed companies, this paper concludes that private listed companies have greater competition advantages than the state-controlled listed companies through empirical study of the relationship between capital structure and product market competition. The policy implication of this conclusion is that favorable capital structure helps to improve the corporate governance structure and strengthen the product market competition advantage of the listed companies. To improve the quality of Chinese listed companies, Chinese government is strongly recommended to take powerful measures to promote the process of privatization and economic performance of the economic entities.

This paper develops a dynamic trade-off model to study the interaction between product market competition and capital structure. Firms make interdependent entry, investment, financing and default decisions. Trade-off between tax benefits, bankruptcy costs and strategic considerations in the product market determines optimal capital structure. The model delivers the following results that are consistent with empirical evidences: (1) Firms may have non-linear and non-monotonic reactions to their competitors’ change of leverage, depending on their original levels of leverage; (2) The within-industry variation of leverage can be large, because incumbents and entrants use leverage strategically differently ; (3) Entrants have higher leverage than incumbents in equilibrium, because the incumbents use lower leverage to gain strategic advantages over the entrants.

本文利用短期融资券的推出作为自然实验研究金融创新引起的公司融资约束变化对公司经营业绩的影响，从而为金融发展与经济增长的关系提供微观证据。利用短期融资券作为自然实验，本文解决了在研究金融发展与经济增长关系中的内生性问题。基于两者关系中“分配金融资源”的理论观点：金融发展能够更加有效的分配资金资源，减少公司的融资约束，增加公司的业绩，本文提供了这一经济作用机制的实证证据。本文发现当短期融资券成为企业潜在的融资工具后，能够利用这一金融工具的企业在负债能力和投资能力方面有了大幅提高，其经营业绩也得到大幅增长。本文的证据表明金融工具创新和金融市场发展对公司价值产生了巨大影响，因此能够促进经济增长。

本文在现有“制度环境与债务融资”研究基础上，进一步结合终极所有权研究公司债务融资问题。理论上本文首次基于控股股东决策视角，通过动态模型研究发现，在利率管制的中国市场上，投资者法律保护不足及控股股东的存在，导致公司过度债务融资，政府干预进一步加剧了这一行为，控股股东现金流权可以有效抑制过度债务融资。实证研究表明，控股股东现金流权与过度债务融资显著负相关，法制环境的改善、政府干预减少显著降低了过度债务融资规模及过度长期债务融资。这一研究在验证本文理论分析的同时，为控股股东利用控制权侵占提供了新的证据。

Many prior studies conclude that Chinese independent directors engage in window dressing. The results of research into the relationship between the proportion of independent directors on the board and firm performance are mixed. We use the number of negative opinions issued by a firm’s independent directors as a proxy for their effectiveness in the monitoring role they play. We hypothesize that both board structure and the personal characteristics of independent directors influence the effectiveness of monitoring. Using a matched control sample of firms in which there were no disputes in the board room over the sample period, we find that independent directors who have more political capital, such as former government officials, Communist Party members, and those who also have a senior management position in another firm are more likely to issue negative opinions. We also find that the independent directors of firms with more balanced power structure in board and those that operate in a better institutional environment have a greater tendency to issue negative opinions.

The controlling shareholder of a firm may suffer as a result of its right to control the firm due to unfavorable market reactions associated with concerns on private benefit extraction by the controlling shareholder. Thus, the controlling shareholder has an incentive to build a good governance mechanism as a commitment device in order to discipline itself, which allows it to sell shares at a higher price in the initial public offering (IPO). An improvement in pricing efficiency will give the controlling shareholder more incentive to limit its private benefits from controlling the firm. Therefore, we propose that, besides improving the efficiency of capital allocation, the development of the financial market can shape the corporate governance of firms in an economy, thus improving firm operation efficiency. A model of IPO is constructed to demonstrate this mechanism of market discipline. Using data from China stock market on the regulatory changes in IPO pricing and firm ownership structure, we find evidence consistent with the model’s implications.

Previous studies have typically found a negative relation between pyramidal ownership and firm value, and have interpreted it as supporting evidence of the incentive problems created by pyramiding. Those studies, however, do not adequately control for the endogeneity of ownership to factors that also affect firm performance, leaving the agency problem indistinguishable from the unfavorable fundamental shock. Using a unique sample of privately owned listed enterprises in China, this paper examines the effect of pyramidal ownership on returns in response to the announcement of the Share Split Reform in China. This reform triggered zero fundamental shocks but resurrected entrepreneurial incentives in proportion to the separation of ownership and control. Estimates of agency cost of pyramidal ownership are significant and material, and are robust against a range of alternative hypotheses. Moreover, institutional investors appear to appreciate the reform more when a firm’s pyramidal ownership is less separated. The findings suggest that, despite the endogenous determinant of ownership choice, agency theory alone successfully explains the pyramidal discount.