Firm Level Implications of Early Stage Venture Capital Investment - An Empiri cal Investigation
AbstractThe paper analyses the impact of venture capital finance on growth and innovation activities of young German firms. Among other variables, our panel of firm data includes data on venture capital funding and patent applications. With statistical matching procedures we draw an adequate control group of nonventure funded but otherwise comparable firms. The analysis confirms other findings that venture funded firms in Germany have higher number of patent applications than those in the control group. However, they do so already before the venture capitalists engagement. After this engagement, the number of patent applications does not differ significantly from that of the control group, however the venture funded firms display significantly larger growthrates. We conclude that the higher innovation output of venture funded firms is mainly driven by the selection process made by the venture capitalist.
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Bibliographic InfoPaper provided by Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group in its series Papers on Entrepreneurship, Growth and Public Policy with number 2005-22.
Length: 24 pages
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Other versions of this item:
- Engel, Dirk & Keilbach, Max, 2007. "Firm-level implications of early stage venture capital investment -- An empirical investigation," Journal of Empirical Finance, Elsevier, vol. 14(2), pages 150-167, March.
- Keilbach, Max & Engel, Dirk, 2002. "Firm Level Implications of Early Stage Venture Capital Investment: An Empirical Investigation," ZEW Discussion Papers 02-82, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D92 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Firm Choice and Growth, Financing, Investment, and Capacity
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
This paper has been announced in the following NEP Reports:
- NEP-ACC-2005-06-19 (Accounting & Auditing)
- NEP-ALL-2005-06-19 (All new papers)
- NEP-CFN-2005-06-19 (Corporate Finance)
- NEP-ENT-2005-06-19 (Entrepreneurship)
- NEP-INO-2005-06-19 (Innovation)
- NEP-MIC-2005-06-19 (Microeconomics)
- NEP-TID-2005-06-19 (Technology & Industrial Dynamics)
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