Editorial

The results reveal a significantly negative impact of Covid-19 on the US stock market being an idiosyncratic black swan event. [...]the author also points out that US may not have hurried to act because its banking sector seemed to recover more quickly than in Australia and Europe. [...]Tetsuya Kirihata's “Contribution of business angel investments: evidence from Estonia” addresses the contribution of business angels (BAs), defined as wealthy individuals who provide risk capital to entrepreneurial firms without family connections in Eastern Europe, Estonia, which is emerging as a start-up hub in the region in recent years.

Venture Capital and Chinese Firms’ Technological Innovation Capability: Effective Evaluation and Mechanism Verification

Making the financial industry a solider mainstay of the real economy is of great concern for China in the midst of economic reform. For China, leveraging venture capital (VC) to enhance a firm’s technological innovation capability (TIC) is an important means of actualising its innovation and development strategy, as well as a must-do to realise sustainable development. In this study, firms that went public from 2010 to 2020 on the A-stock market were used as samples to study the effects of VC on TIC and the relevant mechanism based on the difference-in-differences (DID) method. As research findings show, VC can improve TIC through the medium of the internal incentive and external constraint easing effects. The contributory role of VC in TIC varies with firm size, ownership, and industry type. A range of robustness tests, including the PSM, variable substitution, and instrumental variable methods, further strengthened the reliability of the conclusions. This study can enlighten policymakers on how to implement comprehensive resource factor market reform to build a favourable innovation environment that materialises the role of marketisation.

Understanding the Function of a Social Business Ecosystem

Social entrepreneurs face challenging situations in trying to expand and grow businesses with little investment and limited resources. Interactions and networks between social entrepreneurs, investors, and other stakeholders are indispensable in promoting social entrepreneurship. Together, they come to form a cyclical “social business ecosystem” (SBE), in which social entrepreneurs can finance their projects by paying “share transfer fees.” By using a theoretical/mathematical model in our method, this study examines the fundamental role of share transfer fees in an SBE. In particular, it establishes a moral hazard model that can explain important characteristics of an SBE. As main results, the study identifies conditions under which an SBE can mitigate the moral hazard of social entrepreneurs. The results suggest that SBEs work efficiently for relatively small social projects. This is consistent with actual cases of social business. Within this framework, this study also explores the practical implications of knowledge spillover;social entrepreneurs conduct SBEs more efficiently if they take advantage of knowledge spillover.