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Late-stage venture capital and firm performance: evidence from small and medium-sized enterprises in China

Dai, Xiaoyong; Chapman, Gary; Shen, Hao


Xiaoyong Dai

Hao Shen


Where venture capitalists have traditionally focused on early-stage innovative firms, increasingly venture capitalists are investing in late-stage firms, especially in Asia. The performance consequences of this novel phenomenon of late-stage venture capital remain unexplored. This paper provides novel insight into this phenomenon by examining the impact of late-stage venture capital on two key dimensions of firm performance in the venture capital literature: innovation and financial performance. We link VC investment events to financial indicators of Chinese listed firms to account for the timing of VC entry and identify the firm performance impacts. Utilizing a matching and difference-in-differences procedure to account for selection biases, our results show that late-stage venture capital improves investee firms’ financial performance but reduces their innovation performance. Our findings advance understanding about the emergence of late-stage venture capital and its performance consequences, especially in emerging economies. Our work has implications for entrepreneurs and policymakers.


Dai, X., Chapman, G., & Shen, H. (2022). Late-stage venture capital and firm performance: evidence from small and medium-sized enterprises in China. Applied Economics, 54(20), 2356-2372.

Journal Article Type Article
Acceptance Date Sep 22, 2021
Online Publication Date Oct 18, 2021
Publication Date Apr 27, 2022
Deposit Date Jun 22, 2022
Publicly Available Date Apr 19, 2023
Journal Applied Economics
Print ISSN 0003-6846
Electronic ISSN 1466-4283
Publisher Routledge
Peer Reviewed Peer Reviewed
Volume 54
Issue 20
Pages 2356-2372
Public URL
Publisher URL
Additional Information This is an Accepted Manuscript of an article published by Taylor & Francis in Applied Economics on 18/10/21, available at: