Studying Technology Entrepreneurship in China

Yan Anthea Zhang

China Europe International Business School and

Rice University

Presented at the Academy of Management Annual MeetingBoston, August 2012

Potential Research Topics at Different Stages of Entrepreneurship

ExitClusters as Incubators

Entrepreneurial capability:• Political networking• Functional

experience• Overseas experience

Entrepreneurial strategy:• Innovation search• Alliances• Product innovation

Clusters as Incubators

Zhang, Li, and Schoonhoven. 2009. Inter-Community Relationships and Community growth in China’s High-Technology Industries 1988-2000. Strategic Management Journal, 30(7): 163-183.

Locations of 54 National Technology Development Clusters in China

Figure 3. Industry Dispersion across China's Technology Development Zones

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Electronic Inform

ation

Biotech/Pharm

aceutical

New

Materials

Aeronautical

Engineering

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Energy

Environm

entalProtection

Ocean T

echnology

High T

ech Agriculture

IntegratedO

ptical/Advanced

Manufacturting

Nuclear A

pplication

Types of Industry

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Total Sales Revenue for All Zones 1988-2000

(In 1990 RMB)

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1988 19

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91990

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Entrepreneurial Strategy

Zhang and Li, 2010. Innovation search of new ventures in a technology cluster: The role of ties with service intermediaries. Strategic Management Journal. 31(1): 88-109.• Service intermediaries• Innovation search

Entrepreneurial Capability:

Li and Zhang, 2007. The Role of Managers’ Political Networking and Functional Experience in New Venture Performance: Evidence from China’s Transition Economy, Strategic Management Journal, 28(8):791-804.• TMT political networking• TMT functional experience• Appropriability of TMT human capital

Li, Zhang, Li, Zhou, and Zhang, Forthcoming. Returnees vs. locals: Who perform better in China’s technology entrepreneurship? Strategic Entrepreneurship Journal.• Founders’ overseas experience• Complementary resources

Entrepreneurial Exit

Capital exit• VC/PE involvement

– Valuation – Status of VC/PE– Role of VC/PE

• IPO

Personal exit• Family succession• Managerial professionalization

– Monitoring and incentive

Entrepreneurial Exit-IPO

• Growth Enterprises Market (GEM) board (ChiNext) (创业板）

• The first group of 28 firms debuted IPOs on October 30, 2009

• 200+ firms listed• Potential research topics

– IPO valuation– IPO underpricing– Long term return– Insider share lockup period and lockup period expiration

Trading Volume and Return of the 60-Day Window Of the First Lock-Up Period Expiration

t-30

t-28

t-26

t-24

t-22

t-20

t-18

t-16

t-14

t-12

t-10 t-8 t-6 t-4 t-2 t0 t2 t4 t6 t8 t10 t12 t14 t16 t18 t20 t22 t24 t26 t28

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0

20000000

40000000

60000000

80000000

100000000

120000000

140000000

160000000

First Group N = 28 (300001-300028)

average returntrading volume

t-30

t-28

t-26

t-24

t-22

t-20

t-18

t-16

t-14

t-12

t-10 t-8 t-6 t-4 t-2 t0 t2 t4 t6 t8 t10 t12 t14 t16 t18 t20 t22 t24 t26 t28

-0.3

-0.25

-0.2

-0.15

-0.1

-0.05

0

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

Non First Group (N = 145) (300029-300174)

averge return trade volume

Trading Volume and Return of the 60-Day Window Of the First Lock-Up Period Expiration

THANK YOU!