The Impact of Venture Capital on Innovation Behaviour and Firm Growth
AbstractProposing a novel research design for firm-level impact studies, I investigate the effects of venture capital financing on corporate performance by applying a two-stage propensity score matching on Austrian micro-data. Controlling for differences in industry, location, legal status, size, age, credit rating, export and innovation behaviour, the findings (i) assert the financing function of venture capital, showing that recipients lacked access to satisfactory alternative sources of capital; (ii) identify selection effects, where venture capital is invested in firms with high performance potential; and finally (iii) confirm the value adding function in terms of a genuine causal impact of venture capital on firm growth, yet not on innovation output.
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Bibliographic InfoPaper provided by WIFO in its series WIFO Working Papers with number 363.
Length: 37 pages
Date of creation: 20 Apr 2010
Date of revision:
venture capital; entrepreneurship; firm growth; propensity score matching;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-06 (All new papers)
- NEP-BEC-2010-08-06 (Business Economics)
- NEP-CSE-2010-08-06 (Economics of Strategic Management)
- NEP-ENT-2010-08-06 (Entrepreneurship)
- NEP-INO-2010-08-06 (Innovation)
- NEP-SBM-2010-08-06 (Small Business Management)
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- Spyros Arvanitis & Tobias Stucki, 2013. "The Impact of Venture Capital on the Persistence of Innovation Activities of Swiss Start-ups," KOF Working papers 13-332, KOF Swiss Economic Institute, ETH Zurich.
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