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The Exit Decision in the European Venture Capital Market

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Author Info

  • Elisabete Gomes Santana Felix

    ()
    (Universidade de Evora, Departamento de Gestao)

  • Cesaltina Pires

    ()
    (Universidade de Evora, Departamento de Gestao)

  • Mohamed Azzim Gulamhussenb

    ()
    (Instituto Superior de Ciencias do Trabalho e da Empresa, Departamento de Financas e Contabilidade)

Abstract

This article analyzes the exit decision in the European venture capital market, studying when to exit and how it interacts with the exit form. The paper emphasizes the impact of asymmetric information on the divestment decision. Our model considers the impact of caracteristics of the venture capital investor, characteristics of the investment and contracting variables on the exit decision. Our results show that venture capitalists associated with .financial institutions have quicker exits, a result which is stronger for trade-sales exits. In addition, our results highlight the importance of the contracting variables on the exit decision. An unexpected but interesting result is that the presence in the board of directors leads to longer investment duration.

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Bibliographic Info

Paper provided by University of Evora, CEFAGE-UE (Portugal) in its series CEFAGE-UE Working Papers with number 2008_01.

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Length: 32 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:cfe:wpcefa:2008_01

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Related research

Keywords: Asymmetric information; venture capital; trade sales; IPO; write-offs; exit decision; competing risks model;

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