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An econometric study of the determinants of high tech private equity investment in Europe

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  • Bernard Guilhon
  • Sandra Montchaud

Abstract

Our paper aims at identifying the main determinants of high tech private equity (HTPE) investment in Europe. From an analysis of the basic conditions in the PE industry, we have performed an econometric study based on a sample of 17 European countries. The explanatory variables reflect the macroeconomic, institutional, exit, and innovation environments. The results underline the positive impact of the interest rate which shows the prevalence of a demand effect. A favourable tax and legal framework also has a positive influence as has the exit context which degree of impact varies according to the exit channel in favour of public offering (PO) compared to trade sale (TS). Business enterprise research and development (BERD) expenditure, total RD staff, researchers and patents applications have a positive impact on HTPE investment, which is stronger when variables are focused on the HT area.

Suggested Citation

  • Bernard Guilhon & Sandra Montchaud, 2016. "An econometric study of the determinants of high tech private equity investment in Europe," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 29(3), pages 441-467.
    • Handle: RePEc:ids:ijesbu:v:29:y:2016:i:3:p:441-467
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