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Financing Technology-Based Small Firms in Europe: a review of the empirical evidence

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  • Valérie Revest
  • Sandro Sapio

Abstract

This paper reviews the empirical evidence of the financial sources used by technology-based small firms (TBSFs) in Europe. We shed light on cross-country differences and similarities in the capital structures of TBSFs, in the organization and dynamics of the venture capital industries and high-tech stock markets, as well as in policy-making. We focus on the main European economies, i.e. France, Germany, Italy and the UK. The evidence of a pecking order among capital sources, the rather conservative investment behaviors of venture capital funds in all countries, and the differential performances of hi-tech stock markets cannot be accounted for by the market-based vs. bank-based taxonomy widely used in the research on financial systems.

Suggested Citation

  • Valérie Revest & Sandro Sapio, 2008. "Financing Technology-Based Small Firms in Europe: a review of the empirical evidence," LEM Papers Series 2008/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:2008/23
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    More about this item

    Keywords

    Technology-based small firms; capital structure; venture capital; high-tech stock markets; public support.;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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