The impact of venture capital on the digital industry development: evidence from China

Promoting digital industry development is an important path to accelerating high‐quality economic development. Using the net growth rate of number of digital enterprises to measure the digital industry development and the data at the city level in China from 2005 to 2016 as a sample, this study analyses the mechanisms through which venture capital impacts on digital industry development. This study finds that the increase in venture capital will promote the digital industry development. The impact of the increase in venture capital on the digital industry development is mainly achieved by reducing the exit rate of digital enterprises. In inland areas and non‐city group, the increase in venture capital can significantly promote the digital industry development and the magnitude of the impact is greater.