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Venture capital investments and patenting activity of high-tech start-ups : a micro-econometric firm-level analysis

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  • Fabio Bertoni

    (EM - EMLyon Business School)

  • Annalisa Croce
  • Diego d'Adda

Abstract

The aim of this paper is to analyse empirically the impact of venture capital (VC) finance on the innovation output of new technology-based firms (NTBFs) as reflected by their patenting activity. In particular, we compare the patenting rates of VC-backed and non-VC-backed NTBFs. To investigate whether VC investments spur patenting activity, we consider a unique longitudinal dataset composed of 351 Italian NTBFs operating in high-tech manufacturing industries and software, 33 of which are VC-backed. We estimate different econometric models on panel data, controlling for factors that may affect a firm's patenting behaviour other than the presence of VC, like founders' human capital and use of other sources of financing. The results show that VC investments positively affect subsequent patenting activity and that before receiving VC, VC-backed firms do not exhibit a higher patenting propensity than other firms.

Suggested Citation

  • Fabio Bertoni & Annalisa Croce & Diego d'Adda, 2010. "Venture capital investments and patenting activity of high-tech start-ups : a micro-econometric firm-level analysis," Post-Print hal-02312960, HAL.
    • Handle: RePEc:hal:journl:hal-02312960
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    4. Bertoni, Fabio & Tykvová, Tereza, 2015. "Does governmental venture capital spur invention and innovation? Evidence from young European biotech companies," Research Policy, Elsevier, vol. 44(4), pages 925-935.
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    6. Daojuan Wang & Thomas Schøtt, 0. "Coupling between financing and innovation in a startup: embedded in networks with investors and researchers," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-21.
    7. Lee, Kyounghun & Oh, Frederick Dongchuhl & Shin, Donglim & Yoon, Heejin, 2023. "Internal labor markets and corporate innovation: Evidence from Korean chaebols," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 146-162.
    8. Dong, Weijia & Li, Ye & Lv, Xin & Yu, Chang, 2021. "How does venture capital spur the innovation of environmentally friendly firms? Evidence from China," Energy Economics, Elsevier, vol. 103(C).
    9. Rudra P. Pradhan & Rana P. Maradana & Danish B. Zaki & Saurav Dash & Manju Jayakumar & Kunal Gaurav, 2017. "Venture Capital and Innovation: Evidence from European Economic Area Countries," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 14(06), pages 1-30, December.
    10. Smith, Julia A. & Cordina, Renzo, 2014. "The role of accounting in high-technology investments," The British Accounting Review, Elsevier, vol. 46(3), pages 309-322.
    11. Kraemer-Eis, Helmut & Botsari, Antonia & Gvetadze, Salome & Lang, Frank & Torfs, Wouter, 2021. "European Small Business Finance Outlook 2021," EIF Working Paper Series 2021/75, European Investment Fund (EIF).
    12. Lahr, Henry & Mina, Andrea, 2016. "Venture capital investments and the technological performance of portfolio firms," Research Policy, Elsevier, vol. 45(1), pages 303-318.
    13. Bradley, Samantha R. & Gicheva, Dora & Hassell, Lydia & Link, Albert N., 2013. "Gender Differences in Access to Private Investment Funding to Support the Development of New Technologies," UNCG Economics Working Papers 13-9, University of North Carolina at Greensboro, Department of Economics.
    14. FUKUGAWA Nobuya, 2022. "Effects of the Quality of Science and Innovation on Venture Finance: Evidence from University Spinoffs in Japan," Discussion papers 22006, Research Institute of Economy, Trade and Industry (RIETI).
    15. Bertoni, Fabio & Tykvová, Tereza, 2013. "Which form of venture capital is most supportive of innovation? Evidence from European biotechnology companies," FZID Discussion Papers 69-2013, University of Hohenheim, Center for Research on Innovation and Services (FZID).
    16. repec:thr:techub:1003:y:2020:i:1:p:94-111 is not listed on IDEAS
    17. Hasan Boudlaie, 2020. "Studying the content characteristics of New Technology-Based Firms," Technium Social Sciences Journal, Technium Science, vol. 3(1), pages 94-111, February.
    18. Annalisa Croce & Diego D’Adda & Elisa Ughetto, 2015. "Venture capital financing and the financial distress risk of portfolio firms: How independent and bank-affiliated investors differ," Small Business Economics, Springer, vol. 44(1), pages 189-206, January.
    19. Dina Cunha & Sandra T. Silva & Aurora A.C. Teixeira, 2013. "Are Academic Spin-Offs necessarily New Technology-Based firms?," FEP Working Papers 482, Universidade do Porto, Faculdade de Economia do Porto.
    20. Daojuan Wang & Thomas Schøtt, 2022. "Coupling between financing and innovation in a startup: embedded in networks with investors and researchers," International Entrepreneurship and Management Journal, Springer, vol. 18(1), pages 327-347, March.
    21. WASHIMI Kazuaki, 2021. "Venture Capital and Startup Innovation --Big Data Analysis of Patent Data--," Bank of Japan Research Papers 21-03-12, Bank of Japan.
    22. Bertoni, Fabio & Tykvová, Tereza, 2012. "Which form of venture capital is most supportive of innovation?," ZEW Discussion Papers 12-018, ZEW - Leibniz Centre for European Economic Research.

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