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Europe's Entry into the Venture Capital Business: Efficiency and Policy

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Author Info
Michael Stolpe

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Abstract

This paper provides new evidence on Europe's experience with venture capital in the 1990s. Individual countries' activity is not solely determined by country characteristics and a purely domestic history, but also by a common European experience: the interdependence of valuations in primary equity markets. Each country must seek to improve the efficiency of its venture capital sector independently. Specific policies should depend on initial conditions and on the evolution of micro-efficiency. Initial public offerings backed by venture capital provide the appropriate window to look at the relative efficiency of individual venture capital organizations and their learning process over time. This paper is part of the international research programme on European Integration, Financial Systems and Corporate Performance (EIFC) carried out within the European Commission's specific programme "Improving the Human Research Potential and the Socio-Economic Knowledge Base". A first draft was discussed at the final EIFC programme workshop held on February 23, 2004, at the Kiel Institute for World Economics. Helpful comments from Douglas J. Cumming and other workshop participants as well as financial support from the European Union, DG Research (Contract No. HPSE—CT—1999—00039), are gratefully acknowledged. The project homepage is maintained by Anthony Bartzokas at www.intech.unu.edu/whoswho/index.htm.

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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1223.

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Length: 78 pages
Date of creation: Aug 2004
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Handle: RePEc:kie:kieliw:1223

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Related research
Keywords: Venture capital; New techno­logy-based firms; Initial public offe­rings; Underpricing; Social multiplier;

Find related papers by JEL classification:
G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Georg Gebhardt & Klaus M. Schmidt, 2002. "Der Markt für Venture Capital: Anreizprobleme, Governance Strukturen und staatliche Interventionen," Perspektiven der Wirtschaftspolitik, Blackwell Publishing, vol. 3(3), pages 235-255, 08. [Downloadable!] (restricted)
    Other versions:
  2. Black, Bernard S. & Gilson, Ronald J., 1998. "Venture capital and the structure of capital markets: banks versus stock markets," Journal of Financial Economics, Elsevier, vol. 47(3), pages 243-277, March. [Downloadable!] (restricted)
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  5. Laura Bottazzi & Marco Da Rin, 2002. "Venture capital in Europe and the financing of innovative companies," Economic Policy, CEPR, CES, MSH, vol. 17(34), pages 229-270, 04. [Downloadable!] (restricted)
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  11. Michael Stolpe, 2003. "Learning and Signalling in the French and German Venture Capital Industries," Kiel Working Papers 1156, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  12. Gompers, Paul A., 1998. "Venture capital growing pains: Should the market diet?," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 1089-1104, August. [Downloadable!] (restricted)
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    Other versions:
  15. Andrea Schertler, 2003. "Driving Forces of Venture Capital Investments in Europe: A Dynamic Panel Data Analysis," Kiel Working Papers 1172, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  16. Jay R. Ritter, 2003. "Differences between European and American IPO Markets," European Financial Management, Blackwell Publishing Ltd, vol. 9(4), pages 421-434. [Downloadable!] (restricted)
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    Other versions:
  18. Hellmann, Thomas & Puri, Manju, 2000. "The Interaction between Product Market and Financing Strategy: The Role of Venture Capital," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 13(4), pages 959-84.
  19. Lee Nelson, 2002. "Persistence and Reversal in Herd Behavior: Theory and Application to the Decision to Go Public," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 15(1), pages 65-95, March.
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    Other versions:
  21. Ooghe, Hubert & Manigart, Sophie & Fassin, Yves, 1991. "Growth patterns of the European venture capital industry," Journal of Business Venturing, Elsevier, vol. 6(6), pages 381-404, November. [Downloadable!] (restricted)
  22. Gompers, Paul A., 1996. "Grandstanding in the venture capital industry," Journal of Financial Economics, Elsevier, vol. 42(1), pages 133-156, September. [Downloadable!] (restricted)
  23. Guillermo A. Calvo & Enrique G. Mendoza, 1999. "Regional Contagion and the Globalization of Securities Markets," NBER Working Papers 7153, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  24. Ljungqvist, Alexander P., 1997. "Pricing initial public offerings: Further evidence from Germany," European Economic Review, Elsevier, vol. 41(7), pages 1309-1320, July. [Downloadable!] (restricted)
  25. Grenadier, Steven R, 1999. "Information Revelation through Option Exercise," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 12(1), pages 95-129.
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  27. Richard B. Carter & Frederick H. Dark & Ajai K. Singh, 1998. "Underwriter Reputation, Initial Returns, and the Long-Run Performance of IPO Stocks," Journal of Finance, American Finance Association, vol. 53(1), pages 285-311, 02. [Downloadable!] (restricted)
  28. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  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. [Downloadable!]
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This page was last updated on 2009-11-24.

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