A world away from venture capital funds: Biotechnology and finance in Shanghai

A survey of the financing methods of 19 Shanghai medicinal biotechnology companies revealed a lack of private venture capital fund participation. Alternatively, these companies have obtained financing from government sources based substantially on the reputation and relationships of the companies' officers with government officials. This aligns with recent literature suggesting that China is an exception to the dominant body of literature on the relationship of strong legal and financial institutions to the commercialisation process. The dominant body of literature suggests that strong legal and financial institutions are needed to provide patent protection to promote inventions and their commercialisation which, in turn, protects investors and promotes financing of the commercialisation process.