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Access to finance for innovation: the role of venture capital and the stock market

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  • Francesco Bogliacino

    ()
    (JRC-IPTS)

  • Matteo Lucchese

    (University of Urbino)

Abstract

Financial constraints for young and small firms can prevent them from supporting innovation and employment creation. We analyze two of the various institutional mechanisms which have been proposed to circumvent it: the development of venture capital market and the stock market access. We will use the information provided by two Scoreboards - used to monitor innovative activity in Europe: the Innovation Union Scoreboard and the R&D Scoreboard. With the first, we study the determinants of the venture capital/GDP intensity in Europe. With the second, we try to assess the contribution of stock market to R&D investment. In the first part, we show that venture capital market complements structural feature such as R&D intensity and market capitalization, is more volatile and seems not affected by anticompetitive regulations. In the second part, we show that unlisted SMEs are more research intensive.

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Bibliographic Info

Paper provided by Institute of Prospective Technological Studies, Joint Research Centre in its series JRC-IPTS Working Papers on Corporate R&D and Innovation with number 2011-05.

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Length: 23 pages
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:ipt:wpaper:201105

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Keywords: Venture Capital; R&D; European Policy; Random Effect; Propensity Score Matching.;

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References

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  1. Reinhilde Veugelers & Michele Cincera, 2010. "Young leading innovators and EUÂ?s R&D intensity gap," Policy Contributions 437, Bruegel.
  2. Josh Lerner, 2002. "Boom and bust in the venture capital industry and the impact on innovation," Economic Review, Federal Reserve Bank of Atlanta, issue Q4, pages 25-39.
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  4. Michele Cincera & Julien Ravet, 2010. "Financing constraints and R&D investments of large corporations in Europe and the USA," JRC-IPTS Working Papers on Corporate R&D and Innovation 2010-03, Institute of Prospective Technological Studies, Joint Research Centre.
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  8. Valérie Revest & Alessandro Sapio, 2012. "Financing technology-based small firms in Europe: what do we know?," Small Business Economics, Springer, vol. 39(1), pages 179-205, July.
  9. Paul Gompers & Josh Lerner, 2001. "The Venture Capital Revolution," Journal of Economic Perspectives, American Economic Association, vol. 15(2), pages 145-168, Spring.
  10. Josh Lerner, 2002. "When Bureaucrats Meet Entrepreneurs: The Design of Effective "Public Venture Capital" Programmes," Economic Journal, Royal Economic Society, vol. 112(477), pages F73-F84, February.
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  13. Elisabete Gomes Santana Felix & Cesaltina Pires & Mohamed Azzim Gulamhussenb, 2007. "The Determinants of Venture Capital in Europe - Evidence Across Countries," CEFAGE-UE Working Papers 2007_01, University of Evora, CEFAGE-UE (Portugal).
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  17. Aghion, Philippe & Askenazy, Philippe & Bourlès, Renaud & Cette, Gilbert & Dromel, Nicolas, 2009. "Education, market rigidities and growth," Economics Letters, Elsevier, vol. 102(1), pages 62-65, January.
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  19. Carlota Perez, 2010. "The financial crisis and the future of innovation: A view of technical change with the aid of history," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics 28, TUT Ragnar Nurkse School of Innovation and Governance.
  20. Francesco Bogliacino & Sebastian Gómez Cardona, 2010. "The determinants of R&D Investment: the role of Cash flow and Capabilities," JRC-IPTS Working Papers on Corporate R&D and Innovation 2010-10, Institute of Prospective Technological Studies, Joint Research Centre.
  21. Federico Lucidi & Alfred Kleinknecht, 2010. "Little innovation, many jobs: An econometric analysis of the Italian labour productivity crisis," Cambridge Journal of Economics, Oxford University Press, vol. 34(3), pages 525-546.
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Cited by:
  1. Spyros Arvanitis & Tobias Stucki, 2013. "The Impact of Venture Capital on the Persistence of Innovation Activities of Swiss Start-ups," KOF Working papers 13-332, KOF Swiss Economic Institute, ETH Zurich.

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