Determinants And Legitimacy Of Venture Capital Financing: An Empirical Verification
AbstractThe venture capital activity represents a financing intermediation suitable to the start-up and innovative SMEsÕ needs, and tries to confirm itself in the economic context. Indeed, such financing mode supports the companiesÕ creativity and development, particularly for the under capitalized SMEs whose access to the traditional sources of financing (bank financing and common stock financing) remain always difficult. In this field, this work tries to further explore both the key factors stimulating the venture capital activity, and the contribution of such financing mode to wealth creation and to economic growth. An empirical approach using panel data estimation is inducted here and makes up the contribution of this work. The estimation is relative to two linear regressions which constitute the retained model and tries to test both the effects of key factors on venture capital activity, and the effects of venture capital financings on economic growth. The considered data covers twelve developed countries (USA and eleven European countries), and all OLS, fixed effects and random effects estimates are applied. With respect to test results; however, only the appropriate estimates are taken into consideration. The main results show that venture capital depends positively on the R&D activity, and that such financing mode has a positive effect on economic growth. These results are also discussed to make meaningful comparisons with those of previous studies. Based on the conclusions, it may be recommended to consolidate the positive link ÒR&D Ð venture capital Ð economic growthÓ by the appropriate policies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Anadolu University in its journal Anadolu University Journal of Social Sciences.
Volume (Year): 11 (2011)
Issue (Month): 1 (January)
Contact details of provider:
Postal: Yunus Emre Kampusu 26470, Eskişehir
Phone: (90) (222) 335-0580 x 2743
Fax: (90) (222) 320-1304
Web page: http://www.anadolu.edu.tr/akademik/birim/genelBilgi/205/3429/1
More information through EDIRC
venture capital; R&D; stock exchange capitalization; innovation; growth; start-up;
Find related papers by JEL classification:
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Black, Bernard S. & Gilson, Ronald J., 1998. "Venture capital and the structure of capital markets: banks versus stock markets," Journal of Financial Economics, Elsevier, vol. 47(3), pages 243-277, March.
- van Pottelsberghe de la Potterie, Bruno & Romain, Astrid, 2004. "The Determinants of Venture Capital: Additional Evidence," Discussion Paper Series 1: Economic Studies 2004,19, Deutsche Bundesbank, Research Centre.
- Schertler, Andrea, 2003.
"Driving Forces of Venture Capital Investments in Europe: A Dynamic Panel Data Analysis,"
EIFC - Technology and Finance Working Papers
27, United Nations University, Institute for New Technologies.
- Andrea Schertler, 2003. "Driving Forces of Venture Capital Investments in Europe: A Dynamic Panel Data Analysis," Kiel Working Papers 1172, Kiel Institute for the World Economy.
- Masako Ueda, 2004. "Banks versus Venture Capital: Project Evaluation, Screening, and Expropriation," Journal of Finance, American Finance Association, vol. 59(2), pages 601-621, 04.
- Andrea Schertler, 2007. "Knowledge Capital and Venture Capital Investments: New Evidence from European Panel Data," German Economic Review, Verein für Socialpolitik, vol. 8, pages 64-88, 01.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Social Sciences Institute).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.