Exploring China's venture capital investment dynamics and influencing factors: a perspective of intercity flow

Venture capital (VC) investment process involves the movement of capital, information, and knowledge, influencing the city network. China's intercity VC investments have progressively expanded, giving rise to a large and complex network. The Yangtze River Delta (YRD), Pearl River Delta (PRD), and Beijing-Tianjin-Hebei (BTH) regions have emerged as the core regions of the network. Beijing, Shanghai, Shenzhen, and Hangzhou hold significant positions as VC centers in the country. As western cities like Chengdu have gained prominence, the network has gradually evolved into a diamond structure. Based on the XGBoost and SHAP algorithms, this study explored the importance of socioeconomic factors, geographical location and transportation, and administrative factors in the network evolution. Local financial markets and innovation potential, particularly the number of local VC firms, are pivotal in shaping the network evolution of intercity VC investments. The impact of transportation exhibits an initial increase, followed by a decline. In comparison to socioeconomic factors, geographical location and transportation as well as urban administrative governance, appear to have relatively limited influence. The findings contribute to a more profound understanding of the dynamics behind the evolution of financial capital flows among cities.