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Venture mania in Europe: Its causes and consequences

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  • Schertler, Andrea
  • Stolpe, Michael

Abstract

Over the course of the past twenty years, venture capital has fuelled an entrepreneurial revolution - first in the United States and now in Europe's common market -, which has opened new opportunities for technological innovation, capital investment and employment growth. Some of the most promising opportunities are in science-based industries, like software and biotechnology, which are often seen as driving the transformation to an increasingly knowledge- based economy. Indeed, this transformation would hardly be conceivable without the innovative contributions of business start-ups that rely on venture capital to finance their early stages of growth. So what, if anything, should governments do to support venture capital and help this transformation along? This paper will argue that governments must understand that venture capital is necessarily linked to specialization and therefore cannot be expected to play the same role in any two economies whose place, and contribution, within the international division of labour differ.

Suggested Citation

  • Schertler, Andrea & Stolpe, Michael, 2000. "Venture mania in Europe: Its causes and consequences," Kiel Discussion Papers 358, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkdp:358
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    Cited by:

    1. Stolpe, Michael, 2004. "Non-market interaction in primary equity markets: evidence from France and Germany," Kiel Working Papers 1211, Kiel Institute for the World Economy (IfW).
    2. Engelhardt, Lutz, 2004. "Entrepreneurial business models in the German software industry: Companies, venture capital, and stock market based growth strategies on the Neuer Markt," Discussion Papers, Research Unit: Institutions, States, Markets SP II 2004-04, Social Science Research Center Berlin (WZB).
    3. Rainer Fehn & Carsten-Patrick Meier, 2001. "The Positive Economics of Labor Market Rigidities and Investor Protection," CESifo Working Paper Series 456, CESifo Group Munich.
    4. Stolpe, Michael, 2003. "Distribution dynamics in European venture capital," Kiel Working Papers 1191, Kiel Institute for the World Economy (IfW).
    5. Fehn, Rainer & Meier, Carsten-Patrick, 2000. "The positive economics of corporatism and corporate governance," Kiel Working Papers 982, Kiel Institute for the World Economy (IfW).
    6. Stolpe, Michael, 2004. "Europe's entry into the venture capital business: efficiency and policy," Kiel Working Papers 1223, Kiel Institute for the World Economy (IfW).
    7. Schertler, Andrea, 2002. "Under what conditions do venture capital markets emerge," Kiel Working Papers 1119, Kiel Institute for the World Economy (IfW).
    8. Stolpe, Michael, 2003. "Learning and signalling in the French and German venture capital industries," Kiel Working Papers 1156, Kiel Institute for the World Economy (IfW).
    9. Schertler, Andrea, 2000. "The Impact of Public Subsidies on Venture Capital Investments in Start-Up Enterprises," Kiel Working Papers 1018, Kiel Institute for the World Economy (IfW).
    10. Engelhardt, Lutz, 2005. "Geschäftsmodelle und nationale Institutionen: Ein Vergleich britischer und deutscher Neuemissionen aus der IT-Service- und Softwareindustrie 1996-2002," Discussion Papers, Research Unit: Institutions, States, Markets SP II 2005-01, Social Science Research Center Berlin (WZB).

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