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The impact of venture capital on the productivity growth of European entrepreneurial firms: ‘Screening’ or ‘value added’ effect?

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  • Croce, Annalisa
  • Martí, José
  • Murtinu, Samuele
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    Abstract

    We aim to ascertain to what extent the better performance of European venture capital (VC)‐backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms' productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors ‘imprint’ the portfolio firm.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Business Venturing.

    Volume (Year): 28 (2013)
    Issue (Month): 4 ()
    Pages: 489-510

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    Handle: RePEc:eee:jbvent:v:28:y:2013:i:4:p:489-510

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    Web page: http://www.elsevier.com/locate/jbusvent

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    Keywords: Venture capital; Entrepreneurial firms; Screening; Value added; Imprinting effect;

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    1. Desislava Dikova & Andreja Jaklic & Anze Burger & Aliaz Kuncic, 2014. "Export diversity or focus? What strategy is best for first-time internationalizing SMEs from an emerging market?," Working Papers/Institute for International Business, Institute for International Business iibp1, Institute for International Business.

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