Information Technology, Venture Capital and the Stock Market
AbstractThis paper investigates the relationship between information technology and capital markets, specifically the enabling and stimulating role of the stock market in the `new economy.' A multivariate analysis is used to test the hypothesis that, other things being equal, a more fully developed and mature stock market encourages both faster development of ICT and its use. The findings reveal that stock markets are neither a necessary nor sufficient condition for promoting the development of ICT. Many economies, particularly in Northern Europe, have been able to achieve a high degree of ICT development without a central role for US-style venture capital, IPOs and stock market institutions. Others, with long flourishing stock markets, have failed to become leaders in ICT development. Even in relation to the US where the stock market has, arguably, enhanced the diffusion of ICT in the economy, the paper suggests the markets are not without considerable downsides.
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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Accounting and Finance Discussion Papers with number 00-af47.
Date of creation: Dec 2000
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Web page: http://www.econ.cam.ac.uk/index.htm
information technology; stock markets; venture capital; IPOs;
Find related papers by JEL classification:
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- L0 - Industrial Organization - - General
- G0 - Financial Economics - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-01-21 (All new papers)
- NEP-CFN-2001-02-21 (Corporate Finance)
- NEP-FIN-2000-12-19 (Finance)
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