Venture capital and industrial structure upgrading from the perspective of spatial spillover

Abstract

As an emerging financial entity, venture capital has a significant impact on regional development and local production systems. Previous research results pay more attention to the spatial distribution and agglomeration of venture capital but pay less attention to its spatial externality. This paper used the panel data of 31 provincial-level regions in China from 2003 to 2017 to measure the industrial structure upgrading level from the two dimensions of rationalization of industrial structure and upgrading of industrial structure. Based on regional heterogeneity that determines industrial structure upgrading, local effects and externalities of venture capital, and omission factors, this paper constructs spatial econometrics models of venture capital and industrial structure upgrading. Firstly, venture capital and industrial structure upgrading all have obvious spatial autocorrelation and form different agglomeration areas in local areas. Therefore, regional venture capital and industrial structure upgrading are closely related to regional location factors. China's venture capital has unique spatial attributes. Secondly, venture capital has a significant role in promoting the industrial structure upgrading, although its simulative effect is weak. In addition, in order to further explore the influence mechanism of regional industrial structure upgrading, this paper found the local fixed asset investment level and R&D intensity promoted the upgrading process of local industrial structure at a significant level. The study of this paper has important implications for the formulation of appropriate regional venture investment policies to promote the optimization and upgrading of industrial structures and sustainable development during the transition period of economic development.