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Does Venture Capital Syndication Spur Employment Growth and Shareholder Value? : evidence from German IPO Data

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Author Info
Erik Lehmann () (Department of Economics, University of Konstanz)
Abstract

This study examines empirically the syndication of equity by multiple venture capitalists in Germany. Following the literature, there are mainly two competing views as to why venture capitalists syndicate investments. First, syndication can be viewed as a means of risk-sharing. Second, venture capitalists may provide important productive resources to firms, capital and information. We test hypotheses based on these two aspects. The results show that the syndication of equity and the number of venture capitalists involved cannot be fully explained by firm characteristics like size, age or industry affiliation. Although syndicated investments do not differ significantly in stock-market performance, they show significantly higher growth rates.

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Publisher Info
Paper provided by Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim in its series Working Papers of the Research Group Heterogenous Labor with number 04-11.

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Length: 31 pages
Date of creation: 11 May 2004
Date of revision:
Handle: RePEc:knz:hetero:0411

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Postal: D-78457 Konstanz
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Web page: http://www.uni-konstanz.de/forschergruppewiwi
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Related research
Keywords: Venture Capital ; Human Capital ; Syndication ; Firm Performance;

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Find related papers by JEL classification:
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure
G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

References listed on IDEAS
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    Other versions:
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  18. George P. Baker & Robert E. Kennedy, 2002. "Survivorship and the Economic Grim Reaper," Journal of Law, Economics and Organization, Oxford University Press, vol. 18(2), pages 324-361, October.
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