State-controlled listed companies have always dominated Chinese stock markets. As a result of the rampant scandals related to them, there have been voluminous academic efforts to explore their corporate governance, underpinned by agency costs. However, these studies have yet to examine the phenomenon from the perspective of venture capital and adaptive efficiency. During the last ten years, despite China's remarkable progress in the development of its venture capital market, its domestic venture capital has been marginalized by American competitors. Given the different performance between...