The Determinants of New Venture Sustainable Development: A Corporate Governance Model-Evidence from Small and Medium Listed Companies in China

A venture or Start-up firm is considered new if it has not yet reached a phase in its development where it could be considered a mature business. It has not set up for a long time and has great operation risk. It often meets the liability of newness, so its governance mechanism is different from others'. In this paper, we focus on the assessment of the sustainable development in a venture based on the view of corporate governance, and set up a model to test the relationship of sustainable growth rate and corporate governance in new venture in China. Using the empirical data of 179 small and medium listed companies in 2007, we observe that the governance mechanisms affect the sustainable development of the new venture, that is the inspirit of managers, the frequencies of shareholders meeting, and the reputation of the new venture are positively associated with its sustainable development, while the frequencies of monitors meeting is negatively associated with new venture.