The Impact of High Speed Rail on Incumbent VC Firms' Network Position: Empirical Evidence from China's Prefecture Cities

Abstract

Abstract: The impact of high speed rail (HSR) on venture capital (VC) firms' network position is investigated from the China's prefecture city level with the difference-in-differences model. Main results are summed up as follows:(1) The network position of the incumbent VC firms in HSR cities is significantly improved after HSR opening compared with non-HSR cities; furthermore, this effect is more evident if the incumbent VC firms in HSR cities are of high reputation, if the networking among the incumbent VC firms in HSR cities are close, or if HSR cities are central cities along the high speed rail. (2) The extraterritorial network position of the incumbent VC firms in HSR cities is significantly improved three years after HSR opening compared with non-HSR cities; furthermore, this effect is more evident if the co-investment between the incumbent VC firms and the new entrant VC firms in HSR cities gets successful. The outlined results suggest that the time-space compression induced by HSR affect the evolution of VC network.

Key words: high speed rail, venture capital firm, venture capital network, network position

Wang Han, Dong Jianwei, Liu Huixia, Guo Lihong. The Impact of High Speed Rail on Incumbent VC Firms' Network Position: Empirical Evidence from China's Prefecture Cities[J]. Management Review, 2020, 32(6): 163-174.

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