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Learning and Signalling in the French and German Venture Capital Industries

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  • Michael Stolpe

Abstract

This paper analyses the efficiency of venture capital and its impact on primary equity markets in France and Germany. It shows that venture capital operates according to the signalling model in France and according to the learning model in Germany. Only the learning model can serve as a rationale for government subsidies. In the signalling model, many young venture capital firms succeed without a protected learning period because they already excel in the screening, monitoring and management supporting services they provide. They will seek to signal their quality to outsiders by taking portfolio firms public early. A variety of empirical tests and policy implications are discussed.

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1156.

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Length: 99 pages
Date of creation: Apr 2003
Date of revision:
Handle: RePEc:kie:kieliw:1156

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Keywords: venture capital; initial public offerings; underpricing; learning-by-doing; signalling; new technology-based firms;

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References

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Cited by:
  1. Michael Stolpe, 2004. "Non-Market Interaction in Primary Equity Markets: Evidence from France and Germany," Kiel Working Papers 1211, Kiel Institute for the World Economy.
  2. Michael Stolpe, 2004. "Europe's Entry into the Venture Capital Business: Efficiency and Policy," Kiel Working Papers 1223, Kiel Institute for the World Economy.

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