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Access to finance for innovation: the role of venture capital and the stock market

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Abstract

Financial constraints for young and small firms can prevent them from supporting innovation and employment creation. We analyze two of the various institutional mechanisms which have been proposed to circumvent it: the development of venture capital market and the stock market access. We will use the information provided by two Scoreboards - used to monitor innovative activity in Europe: the Innovation Union Scoreboard and the R&D Scoreboard. With the first, we study the determinants of the venture capital/GDP intensity in Europe. With the second, we try to assess the contribution of stock market to R&D investment. In the first part, we show that venture capital market complements structural feature such as R&D intensity and market capitalization, is more volatile and seems not affected by anticompetitive regulations. In the second part, we show that unlisted SMEs are more research intensive.

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  • Francesco Bogliacino & Matteo Lucchese, 2011. "Access to finance for innovation: the role of venture capital and the stock market," JRC Working Papers on Corporate R&D and Innovation 2011-05, Joint Research Centre (Seville site).
  • Handle: RePEc:ipt:wpaper:201105
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    Cited by:

    1. Spyros Arvanitis & Tobias Stucki, 2014. "The impact of venture capital on the persistence of innovation activities of start-ups," Small Business Economics, Springer, vol. 42(4), pages 849-870, April.
    2. 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.

    More about this item

    Keywords

    Venture Capital; R&D; European Policy; Random Effect; Propensity Score Matching.;

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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