Table 9. Open in new tab Misalignments...

Type of misalignment

Key manifestations

Unintended consequences

Evidence

Strategic-financial

• Short-term returns vs long-term development
• Measurable metrics vs strategic objectives
• Financial performance vs technological advancement

Behavioral:
• Risk-averse investment patterns
• Focus on mature technologies
Structural:
• Resource concentration in downstream
Institutional:
• Goal displacement

• 31.33% investments in mature rounds
• 20.92% in post-IPO investments
• ROE exceeding 22% while strategic goals remain unmet

Political–economic

• Local implementation vs national priorities
• Political incentives vs strategic goals
• Bureaucratic career concerns

Behavioral:
• Rent-seeking and strategic gaming
• Failed projects like Quanxin
Structural:
• Fragmented industrial development
Political:
• Local protectionism

• Local state-owned capital share increased from 20% to 45.56%
• Corruption charges of senior executives

Knowledge-Incentive

• Market expertise vs strategic control
• Professional management vs policy oversight
• Information asymmetry

Behavioral:
• Opportunistic investment decisions
Structural:
• Biased project selection
Institutional:
• Weakened strategic alignment

• Undisclosed related party transactions in Shenzhen Hongtai Fund
• 64% of repeated funding in mature rounds

Table 9.

Open in new tab

Misalignments and unintended consequences.

Type of misalignment	Key manifestations	Unintended consequences	Evidence
Strategic-financial	• Short-term returns vs long-term development • Measurable metrics vs strategic objectives • Financial performance vs technological advancement	Behavioral: • Risk-averse investment patterns • Focus on mature technologies Structural: • Resource concentration in downstream Institutional: • Goal displacement	• 31.33% investments in mature rounds • 20.92% in post-IPO investments • ROE exceeding 22% while strategic goals remain unmet
Political–economic	• Local implementation vs national priorities • Political incentives vs strategic goals • Bureaucratic career concerns	Behavioral: • Rent-seeking and strategic gaming • Failed projects like Quanxin Structural: • Fragmented industrial development Political: • Local protectionism	• Local state-owned capital share increased from 20% to 45.56% • Corruption charges of senior executives
Knowledge-Incentive	• Market expertise vs strategic control • Professional management vs policy oversight • Information asymmetry	Behavioral: • Opportunistic investment decisions Structural: • Biased project selection Institutional: • Weakened strategic alignment	• Undisclosed related party transactions in Shenzhen Hongtai Fund • 64% of repeated funding in mature rounds

Type of misalignment	Key manifestations	Unintended consequences	Evidence
Strategic-financial	• Short-term returns vs long-term development • Measurable metrics vs strategic objectives • Financial performance vs technological advancement	Behavioral: • Risk-averse investment patterns • Focus on mature technologies Structural: • Resource concentration in downstream Institutional: • Goal displacement	• 31.33% investments in mature rounds • 20.92% in post-IPO investments • ROE exceeding 22% while strategic goals remain unmet
Political–economic	• Local implementation vs national priorities • Political incentives vs strategic goals • Bureaucratic career concerns	Behavioral: • Rent-seeking and strategic gaming • Failed projects like Quanxin Structural: • Fragmented industrial development Political: • Local protectionism	• Local state-owned capital share increased from 20% to 45.56% • Corruption charges of senior executives
Knowledge-Incentive	• Market expertise vs strategic control • Professional management vs policy oversight • Information asymmetry	Behavioral: • Opportunistic investment decisions Structural: • Biased project selection Institutional: • Weakened strategic alignment	• Undisclosed related party transactions in Shenzhen Hongtai Fund • 64% of repeated funding in mature rounds

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