We control the investor and investment-specific
factors to test how macro factors affect the exit of venture capital. After
using a sample of 28668 VC investments in China, we discover that macro factors
such as legal rights and GDP growth have a positive impact on successful exit,
which means that macro factors can increase the likelihood of successful exit.
Surprisingly, market liquidity which is one kind of macro factors can
significantly reduce the likelihood of trade sale, which is different from our
predictions. In addition, we find that the VC-backed firms with more amount
investment and bigger syndicate size will have more opportunities to IPO, but
the VC investors with more experience will decrease the likelihood of trade
sale and liquidation.
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