Sino Inno Cap

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Research

We provide cutting edge knowledge on investments within China, into China and from China outwards into the western market. We research about the significance, structure and modes of action of innovation management in the course of inorganic growth.

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Research Project Overview

Our research investigates the significance, structure and impact of external innovation measures in the course of the inorganic corporate development of large Chinese enterprises (both private and state-owned) through corporate venture capital (and, by extension, through M&A) as a tool for achieving technology leadership in key industries.

 China has been highly successful in demonstrating how equity investment in key technologies can lead to market leadership. The emerging country of China has already overtaken Germany and Europe in some key industries. In 2018, for example, of the top 20 global Internet companies, eleven are from the United States and nine are from China, none from Europe. Germany and Europe can learn from Chinese methods of promoting innovation. The topic is highly relevant at present, especially due to the corporate investments by Chinese companies and the technological focus of the “Made in China 2025” initiative. Both public and private actors (e.g. investors and technology companies) from Germany and Europe should learn more about Chinese successes.

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Research Structure and Artefacts

While there are many publications on CVC in the U.S. and Europe, little research has been done on CVC activities in China. The research focus lies on gaining knowledge about the significance, structure and modes of action of external innovation management in the course of inorganic corporate development of private and state-owned Chinese organizations as parts of the innovation ecosystem in China through corporate venture capital (and by extension M&A). Our research tackles the following questions:

 

  • How is corporate venture capital understood and implemented in China?

  • Who are the players?

  • What structures and strategies are used?

  • What is the relationship between CVC by Chinese actors (private as well as state-owned) and innovation policies to promote key technologies identified by the Chinese government?

  • How does CVC in Germany and Europe differ from the Chinese model?

  • What is the role of the institutional environment in moderating these differences?

  • How do new policies influence venture capital flow?

  • Methodology:
    Methodologically, we will apply a mixed-methods approach. We will use concepts from the field of triangulation, i.e. the corroboration of data points by multiple sources. On the one hand, we use comparative data on international CVC activities. On the other hand, conspicuous cases from the quantitative analysis are scrutinized by qualitative methods, especially against the background of innovation policy conditions in China. We combine western and Chinese datasets to work with a representative sample data set.
  • Data Sets:
    Our projects will use multiple datasets: Native Chinese CVC data sets with more than 10 thousand paid CVC institutional customers and western datasets that covers over 11,600 private capital funds and fund-of-funds, representing over $9 trillion in committed capital across the full spectrum of private capital strategies, including private equity, private debt, and real assets.
  • Takeaways:
    Although there are many publications on CVC in the U.S. and Europe, little research has been done on CVC activities in China. For those who are interested in Chinese CVC, our research will have the following takeaways:
    • Chinese venture capital industry analysis including key players, structures, and strategies.
    • The relationship between CVC by Chinese actors (private as well as state-owned) and innovation policies to promote key technologies identified by the Chinese government. • Difference between CVC in Germany and Europe and the role of the institutional environment in moderating these differences.
    • The influence of new policies to venture capital flow.
    • The influence of the institutional framework of "Made in China 2025" policy initiative to CVC and M&A activity.

The concrete research results should lead to scientific articles and a practitioner study. In addition, the conception of case studies for university teaching and a conference as part of the China Europe Finance Summit are planned.