Essays on venture capital directors’ demographics, firm innovation and the economic impacts of technology disputes evidence from China

  • Jiani FAN

Student thesis: PhD Thesis


In the context of the global trend toward a knowledge economy, the Chinese government has undertaken massive entrepreneurial initiatives to transform its innovation ecosystem and achieve sustainable growth through technological catch-up (Lee, 2021). Building upon the existing literature that examines the precise drivers for corporate innovation (e.g., Lerner et al., 2011), this thesis investigates the influence of VC directors’ characteristics and demographics on innovation and, more importantly, uncovers the underlying mechanisms through which VC directors exert their influence. The final study examines Chinese firms’ stock price responses to the investigations of the alleged infringement of American IPRs, i.e., Section 337 investigations, by the U.S. International Trade Commission (USITC) in its import trade.
This research uses panel data of A-share manufacturing firms in China from 2005–2019. We obtain data from various commercial and public sources, including the China Stock Market & Accounting Research (CSMAR), PEdata, Wind and incoPat database, and official financial websites. To mitigate endogeneity and establish causality, we employ propensity score matching (PSM) instrumental variable (IV) methodology, event study approach and difference-in-differences (DID) technique, providing conforming evidence that supports our hypothesis.
In Chapter Two, we find that VC board participation, especially their human and social capital derived from education, training and experience, significantly contributes to innovation in portfolio firms. The results of mechanisms tests indicate that the positive correlation between VC participation on boards and firm innovation is mediated by the reduced level of financial constraints and increased diversity of top managers.
In Chapter Three, we first identify a positive association between female VC board participation and firm innovation, implying that Chinese female VCs contribute to growing resource commitments and greater success in innovation through quality board services in portfolio firms. We then show that firms with female VC board directors exhibit a lower adverse effect of managerial myopia, capital market pressure, and product market competition on innovation activities.
In Chapter Four, our evidence suggests that while the stock market responds negatively to the announcements of Section 337 investigations in the short run, the average buy-and-hold returns (BHARs) over two and three years are positive. Tests on economic mechanisms show that firms affected by Section 337 investigations increase R&D investments and overseas sales to other countries and, thus, have a higher value in the long run.
Our results are robust to the use of alternative event windows, alternative variable definitions and methodologies.
Date of AwardNov 2022
Original languageEnglish
Awarding Institution
  • University of Nottingham
SupervisorXiuping Hua (Supervisor) & Weimin Liu (Supervisor)


  • venture capital directors
  • female venture capitalists
  • IP protections
  • innovation
  • China
  • stock market reactions
  • 337 investigations

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