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The role of venture capital in alleviating financial constraints of innovative firms

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  • Bottazzi, Laura

    ()
    (Bologna University, Italy)

Abstract

Venture capital is considered to be the most appropriate form of financing for innovative firms in high-tech sectors. We provide an assessment of venture capital with some of Europe’s most innovative and successful companies: those listed on Europe’s “new” stock markets. Venture capital is effective in helping these firms overcome credit constraints but has a limited effect on their ability to grow and create jobs. This result clashed with the evidence on the role of VC for US companies. Yet, VC is not only about money but also about steering and supporting portfolio companies, activities which depend on venture capitalists’ educational and organizational background as well as on the legal and cultural environment in which they operate.

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Bibliographic Info

Paper provided by European Investment Bank, Economics Department in its series EIB Papers with number 9/2009.

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Length: 23 pages
Date of creation: 23 Dec 2009
Date of revision:
Handle: RePEc:ris:eibpap:2009_009

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Keywords: Venture capital; innovative firm; financing constraint; start-up; IPO; investor activism; legal system;

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References

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Cited by:
  1. Veysov, Alexander & Stolbov, Mikhail, 2011. "The impact of financial sector on innovation activity: theoretical background and new evidence from russian banking sector," MPRA Paper 38747, University Library of Munich, Germany.

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