This study empirically examines how venture capital investment affects firms’ financing structure, financial performance, and technological innovation, focusing on Korean manufacturing firms. The results show that domestic venture capital tends to invest in firms with strong growth potential and technological innovation performance. Firms that receive venture capital investment are found to adjust their financing structures more efficiently depending on their financial conditions and investment characteristics. Their efficiency in converting external capital into financial performance, such as growth and profitability, also improves significantly, with the effect being stronger for firms that attract equity investment than for those that rely on debt financing.

The impact of venture capital on corporate financing, however, differs depending on the performance and direction of technological innovation. When firms exhibit strong innovation outcomes or pursue innovation trajectories that are likely to translate into short-term increases in firm value, venture capital helps alleviate information asymmetry and improves firms’ access to finance. By contrast, information related to radical innovation, which may indicate the potential for long-term profitability, is not sufficiently transmitted to capital markets. In fact, an expansion of external financing for venture-backed firms significantly promotes radical innovation, suggesting that radical innovation is structurally subject to more severe financial constraints.

These findings indicate that enhancing the long-term growth and innovativeness of scale-up-stage manufacturing firms requires large-scale capital provision by investors with relatively low information asymmetry regarding the firms. However, domestic venture capital faces limitations in directly providing follow-on investment at the scale-up stage or in sufficiently attracting external investment by mitigating information asymmetry in capital markets, due to constraints in fund size and sectoral expertise. As policy responses, this study proposes expanding the role of corporate venture capital and revitalizing the follow-on investment market through policy funds.

Abstract (ENG)
Preface
Summary (KOR)

Chapter 1. Introduction
　Section 1. Research Objectives
　Section 2. Literature Review

Chapter 2. Venture Capital Investment Data

Chapter 3. Performance of Manufacturing Firms by Technological Innovation Characteristics
　Section 1. Construction of Technological Innovation Indicators
　Section 2. Characteristics of Innovation Activities in Korean Manufacturing Firms
　Section 3. Firm Performance by Technological Innovation Characteristics

Chapter 4. Determinants of Venture Capital Investment in Manufacturing Firms

Chapter 5. Venture Capital Investment and Financing of Manufacturing Firms
　Section 1. Financing Patterns of Venture Capital-Backed Firms
　Section 2. Financing Patterns and Effects of Venture Capital Investment by Manufacturing Firm Characteristics

Chapter 6. Venture Capital Investment and Investment Efficiency of Manufacturing Firms
　Section 1. Effects of Venture Capital Investment on Financial Performance and Financing
　Section 2. Effects of Venture Capital Investment on Technological Innovation Performance and Direction

Chapter 7. Conclusion and Policy Recommendations
　Section 1. Enhancing the Role of Corporate Venture Capital
　Section 2. Promoting Scale-Up Investment through Policy Funds

References
Appendix