The Determinants of Venture Capital in Europe - Evidence Across Countries
AbstractThis article analyzes the determinants of the European venture capital market, extending the equilibrium model from Jeng and Wells (2000). Our empirical model includes many of the determinants already tested in previous studies. In addition, we test whether the unemployment rate, the trade sale divestment and the market-to-book ratio are important factors in explaining venture capital. We use aggregated data from the European venture capital market as well as macroeconomic data, to estimate panel data models, with fixed and random effects. The random effects models revealed to be the most adequate. Our results confirm the importance of some of the already known factors and show that the unemployment rate and trade sale divestments are important determinants in the European venture capital market.
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Bibliographic InfoPaper provided by University of Evora, CEFAGE-UE (Portugal) in its series CEFAGE-UE Working Papers with number 2007_01.
Length: 32 pages
Date of creation: 2007
Date of revision:
Venture capital; Europe; Venture capital determinants; IPO; Trade sale; Write-off; Unemployment rate;
Find related papers by JEL classification:
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-12-01 (All new papers)
- NEP-CFN-2007-12-01 (Corporate Finance)
- NEP-EEC-2007-12-01 (European Economics)
- NEP-ENT-2007-12-01 (Entrepreneurship)
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- Kraeussl, R. & Krause, S., 2011.
"Has Europe Been Catching Up? An Industry Level Analysis of Venture Capital Success over 1985 - 2009,"
327, Banque de France.
- Kräussl, Roman & Krause, Stefan, 2012. "Has Europe been catching up? An industry level analysis of venture capital success over 1985 - 2009," CFS Working Paper Series 2012/16, Center for Financial Studies (CFS).
- Francesco Bogliacino & Matteo Lucchese, 2011.
"Access to finance for innovation: the role of venture capital and the stock market,"
ECONOMIA E POLITICA INDUSTRIALE,
FrancoAngeli Editore, vol. 2011(4), pages 165-183.
- Francesco Bogliacino & Matteo Lucchese, 2011. "Access to finance for innovation: the role of venture capital and the stock market," JRC-IPTS Working Papers on Corporate R&D and Innovation 2011-05, Institute of Prospective Technological Studies, Joint Research Centre.
- Kraeussl, Roman & Krause, Stefan, 2010. "Are particular industries more likely to succeed? A comparative analysis of VC investment in the US and Europe," CFS Working Paper Series 2010/02, Center for Financial Studies (CFS).
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