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Active financial intermediation: Evidence on the role of organizational specialization and human capital

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  • Bottazzi, L.
  • Da Rin, M.

    (Tilburg University)

  • Hellmann, T.

Abstract

Financial intermediaries can choose the extent to which they want to be active investors, providing valuable services like advice, support and corporate governance. We examine the determinants of the decision to become an active financial intermediary using a hand-collected dataset on European venture capital deals. We find organizational specialization to be a key driver. Venture firms which are independent and focused on venture capital alone get more involved with their companies. The human capital of venture partners is another key driver of active financial intermediation. Venture firms whose partners have prior business experience or a scientific education provide more support and governance. These results have implications for prevailing views of financial intermediation, which largely abstract from issues of specialization and human capital.

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Bibliographic Info

Paper provided by Tilburg University in its series Open Access publications from Tilburg University with number urn:nbn:nl:ui:12-3159708.

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Length: 35
Date of creation: 2004
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Handle: RePEc:ner:tilbur:urn:nbn:nl:ui:12-3159708

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Web page: http://www.tilburguniversity.edu/

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Cited by:
  1. Tereza Tykvová, 2006. "How do investment patterns of independent and captive private equity funds differ? Evidence from Germany," Financial Markets and Portfolio Management, Springer, vol. 20(4), pages 399-418, December.
  2. Beuselinck, C.A.C. & Manigart, S., 2007. "Financial reporting quality in private equity backed companies: The impact of ownership concentration," Open Access publications from Tilburg University urn:nbn:nl:ui:12-358481, Tilburg University.
  3. Da Rin, Marco & Nicodano, Giovanna & Sembenelli, Alessandro, 2006. "Public policy and the creation of active venture capital markets," Journal of Public Economics, Elsevier, vol. 90(8-9), pages 1699-1723, September.

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