Accessible Version
Cross-border venture capital and reverse technology flows, Accessible Data
Figure 1. Foreign CVC as a share of all U.S. venture capital investment and Chinese share
Panel A of this figure depicts the share of all VC investments in the U.S. that is attributable to foreign CVCs over time. Panel B shows the annual percentage of foreign investment in U.S. startups coming from China. The solid line represents the percentage of foreign CVC investments made by Chinese corporate VCs, while the dashed line indicates the percentage of total foreign VC investments made by all Chinese VCs. Both data series are smoothed using a 3-year trailing moving average.
Figure 2. Dynamic effects of foreign CVC investment into U.S. startups
This figure examines how a foreign country’s patenting in a technology class (Panel A) and citations by those patents to the existing ones in that class (Panel B) evolve after a corporation based in that nation invests in a U.S. startup specializing in that technology. Observations are at the patent class by country by year level. The sample consists of the five years before and after a country’s first investment in a U.S. startup specializing in a particular technology class. In Panel A, the dependent variable is $$ log(1+Patents_{fct}) $$, where $$ Patents_{fct} $$ represents the number of patents in the technology class $$c$$ filed in the year $$t$$ by entities in the foreign nation $$f$$. In Panel B, the dependent variable is $$ log(1+Citations_{fct}) $$, where $$ Citations_{fct} $$ represents the number of citations by patents in the technology class $$c$$ filed in the year $$t$$ by entities in the foreign nation $$f$$ to patents in class $$c$$. Changes in the country’s innovative activity in the "treated" technology class are graphed relative to changes in the same country’s innovative activity in a similar "control" technology class, in which it never invested. Treated classes are matched to control classes based on two measures of innovative activity in a class during the five years prior to investment: (1) the country’s annual number of (eventually granted) patent applications in the class, and (2) the country’s annual number of citations to U.S. startup patents in the class. A country is classified as having invested in a U.S. startup specializing in a technology class if a corporation based in that country invested in a U.S. startup that had a majority patent applications in that class at the time of investment. Patent classes are defined using the United States patent classification scheme. The analysis includes country-by-class and year fixed effects. Standard errors are clustered at the treatment-control pair level.
Figure 3. Dynamic effects of Chinese CVC investment into U.S. startups
This figure examines how patenting in China in a technology class (Panel A) and citations by those patents to the existing ones in that class (Panel B) evolve after a corporation based in China invests in a U.S. startup specializing in that technology. Observations are at the patent class by year level. The sample consists of the five years before and after the first investment in a U.S. startup specializing in a particular technology class. In Panel A, the dependent variable is $$ log(1+Patents_{ct}) $$, where $$Patents_{ct}$$ represents the number of patents in the technology class $$c$$ filed in the year $$t$$ by Chinese entities. In Panel B, the dependent variable is $$ log(1+Citations_{ct}) $$, where $$Citations_{ct}$$ represents the number of citations by patents in the technology class $$c$$ filed in the year $$t$$ by Chinese entities to patents in class $$c$$. Changes in the innovative activity in the "treated" technology class are graphed relative to changes in the innovative activity in a similar "control" technology class, in which China never invested. Treated classes are matched to control classes based on two measures of innovative activity in a class during the five years prior to investment: (1) the annual number of (eventually granted) Chinese patent applications in the class, and (2) the annual number of citations to U.S. startup patents in the class. China is classified as having invested in a U.S. startup specializing in a technology class if a Chinese corporation invested in a U.S. startup that had a majority patent applications in that class at the time of investment. Patent classes are defined using the United States patent classification scheme. The analysis includes country and year fixed effects. Standard errors are clustered at the technology class level.
Figure 4. Dynamic effects of foreign CVC investment and technology class basicness
This figure examines how a foreign country’s patenting in a technology class (Panel A) and citations by those patents to the existing ones in that class (Panel B) evolve after a corporation based in that nation invests in a U.S. startup specializing in that technology measuring the effects in two samples that divide technology classes based on their basicness level. High Basicness is an indicator equal to one if class c is above the median in terms of the number of backward academic citations in its patent applications submitted at time $$t$$. Low Basicness is defined similarly. Observations are at the patent class by country by year level. The sample consists of the five years before and after a country’s first investment in a U.S. startup specializing in a particular technology class. In Panel A, the dependent variable is $$ log(1+Patents_{fct}) $$, where $$Patents_{fct}$$ represents the number of patents in the technology class $$c$$ filed in the year $$t$$ by entities in the foreign nation $$f$$. In Panel B, the dependent variable is $$ log(1+Citations_{fct}) $$, where $$Citations_{fct}$$ represents the number of citations by patents in the technology class $$c$$ filed in the year $$t$$ by entities in the foreign nation f to patents in class $$c$$. Changes in the country’s innovative activity in the "treated" technology class are graphed relative to changes in the same country’s innovative activity in a similar "control" technology class, in which it never invested. Treated classes are matched to control classes based on two measures of innovative activity in a class during the five years prior to investment: (1) the country’s annual number of (eventually granted) patent applications in the class, and (2) the country’s annual number of citations to U.S. startup patents in the class. A country is classified as having invested in a U.S. startup specializing in a technology class if a corporation based in that country invested in a U.S. startup that had a majority patent applications in that class at the time of investment. Patent classes are defined using the United States patent classification scheme. The analysis includes country-by-class and year fixed effects. Standard errors are clustered at the treatment-control pair level.