Can Construction of Smart Cities Promote Cross-border Venture Capital Inflows? : Evidence from China

Zhe Gao

doi:10.54254/2754-1169/2025.19674

Research Article

Open access

Published on 3 January 2025

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Gao,Z. (2025). Can Construction of Smart Cities Promote Cross-border Venture Capital Inflows? : Evidence from China. Advances in Economics, Management and Political Sciences,159,11-19.

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Can Construction of Smart Cities Promote Cross-border Venture Capital Inflows? : Evidence from China

Zhe Gao *^,1,

¹ Sun Yat-sen University (SYSU)

* Author to whom correspondence should be addressed.

https://doi.org/10.54254/2754-1169/2025.19674

Abstract

This study analyzes the influence of smart city development on cross-border venture capital investments. The author employs panel data from 280 prefecture-level and higher cities in China, spanning 2009 to 2021, utilizing the difference-in-differences (DID) model and the propensity score matching difference (PSM-DID) method. The results indicate that the construction of smart cities significantly promotes the inflow of cross-border VC, specifically reflected in the increase in both the quantities and values of cross-border VC inflows, and this effect is characterized by long-term persistence and a certain degree of lag. Upon evaluating spatial spillover effects, the development of smart cities continues to exert a substantial positive influence on local cross-border venture capital inflows, while simultaneously creating a siphon effect on adjacent cities. In megacities and megalopolises, the development of smart cities markedly increases the influx of cross-border venture capital, but this impact is less pronounced in big and medium-sized cities. In cities with elevated levels of research and education, the development of smart cities significantly influences cross-border venture capital inflows.

Keywords

Smart cities, Cross-border VC, Innovation, Entrepreneurship, Multi period DID

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References

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Cite this article

Gao,Z. (2025). Can Construction of Smart Cities Promote Cross-border Venture Capital Inflows? : Evidence from China. Advances in Economics, Management and Political Sciences,159,11-19.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 4th International Conference on Business and Policy Studies

Conference website: https://2025.confbps.org/

ISBN：978-1-83558-879-6(Print) / 978-1-83558-880-2(Online)

Conference date: 20 February 2025

Editor：Canh Thien Dang

Series: Advances in Economics, Management and Political Sciences

Volume number: Vol.159

ISSN：2754-1169(Print) / 2754-1177(Online)

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