Abstract: In this paper, we construct an analytical framework of the relationship between the industry expertise of venture capital and the cross-industry M&A choices of the invested enterprises, and make an empirical test based on the data of China's GEM listed companies from 2011 to 2018. The results show that industry expertise of venture capital plays a promoting role in cross industry M&A with higher risk; the strong absorptive capacity of enterprises promotes the tendency of using venture capital industry expertise to carry out cross industry M&A; the high participation degree of venture capital inhibits the promotion effect of venture capital industry expertise on cross industry M&A; the higher marketization level the acquirer is exposed to, the better able the venture capital industry expertise is to promote cross industry M&A; the industry expertise of venture capital and the investment expertise of venture capital in the industry of M&A target enterprises can help improve the performance of cross industry M&A. This paper is of great significance for exploring the role of financial intermediaries in promoting the important strategy of enterprises, and deepening the understanding of the strategic behavior interaction between venture capital institutions and invested enterprises. It also provides a new theoretical perspective and practical reference for enterprises to carry out cross industry mergers and acquisitions and capital flow across industries.

Key words: venture capital, industry expertise, cross industry M&A