[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/hal/cesptp/halshs-00593962.html
   My bibliography  Save this paper

Venture capital in bank - and market - based economies

Author

Listed:
  • Adeline Saillard

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Thomas Url

    (WIFO - Austrian Institute of Economic Research)

Abstract
The determinants of venture capital investment have attracted a significant amount of attention from both academics and policymakers. We use a version of the Keuschnigg-Nielsen model for venture-capital-financed projects to condition our analysis on a reasonable set of exogenous variables but we focus on one determinant : financial market structure. The type of financial market structure (bank -or market-based) contributes substantially to explaining differences among countries with respect to the extent of venture capital investments in the initial business stages. We will use the cross country and time series variation from a panel of 19 industrial countries to support the hypothesis that venture capital thrives within market-based financial systems and is confined to an ancillary role in bank-based systems.

Suggested Citation

  • Adeline Saillard & Thomas Url, 2011. "Venture capital in bank - and market - based economies," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00593962, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00593962
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00593962
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-00593962/document
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Martinsson, Gustav, 2010. "Equity financing and innovation: Is Europe different from the United States?," Journal of Banking & Finance, Elsevier, vol. 34(6), pages 1215-1224, June.
    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    3. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
    4. Bruno, Giuseppe & De Bonis, Riccardo & Silvestrini, Andrea, 2012. "Do financial systems converge? New evidence from financial assets in OECD countries," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 141-155.
    5. Lerner, Josh, 1995. "Venture Capitalists and the Oversight of Private Firms," Journal of Finance, American Finance Association, vol. 50(1), pages 301-318, March.
    6. Steven N. Kaplan & Per Strömberg, 2003. "Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 281-315.
    7. Becker, Ralf & Hellmann, Thomas F., 2000. "The Genesis of Venture Capital: Lessons from the German Experience," Research Papers 1705, Stanford University, Graduate School of Business.
    8. Gompers, Paul A, 1995. "Optimal Investment, Monitoring, and the Staging of Venture Capital," Journal of Finance, American Finance Association, vol. 50(5), pages 1461-1489, December.
    9. French, Kenneth R & Poterba, James M, 1991. "Investor Diversification and International Equity Markets," American Economic Review, American Economic Association, vol. 81(2), pages 222-226, May.
    10. Bronwyn Hall, 2004. "The financing of research and development," Chapters, in: Anthony Bartzokas & Sunil Mani (ed.), Financial Systems, Corporate Investment in Innovation, and Venture Capital, chapter 2, Edward Elgar Publishing.
    11. Oliver Hart & John Moore, 1994. "A Theory of Debt Based on the Inalienability of Human Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 841-879.
    12. Asli Demirguc-Kunt & Ross Levine (ed.), 2004. "Financial Structure and Economic Growth: A Cross-Country Comparison of Banks, Markets, and Development," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262541793, April.
    13. Beck, Thorsten & Levine, Ross, 2004. "Stock markets, banks, and growth: Panel evidence," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 423-442, March.
    14. Fenghua Song & AnjanV. Thakor, 2010. "Financial System Architecture and the Co-evolution of Banks and Capital Markets," Economic Journal, Royal Economic Society, vol. 120(547), pages 1021-1055, September.
    15. Frances X. Frei & Patrick T. Harker, 1999. "Value Creation and Process Management: Evidence from Retail Banking Diversity of Opinion and Financing of New Technologies," Center for Financial Institutions Working Papers 99-16, Wharton School Center for Financial Institutions, University of Pennsylvania.
    16. Demirguc-Kunt, Asli & Levine, Ross, 1999. "Bank-based and market-based financial systems - cross-country comparisons," Policy Research Working Paper Series 2143, The World Bank.
    17. Alberto Alesina & Silvia Ardagna & Giuseppe Nicoletti & Fabio Schiantarelli, 2005. "Regulation And Investment," Journal of the European Economic Association, MIT Press, vol. 3(4), pages 791-825, June.
    18. Beck, Thorsten & Levine, Ross, 2002. "Industry growth and capital allocation:*1: does having a market- or bank-based system matter?," Journal of Financial Economics, Elsevier, vol. 64(2), pages 147-180, May.
    19. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
    20. Allen, Franklin & Gale, Douglas, 1999. "Diversity of Opinion and Financing of New Technologies," Journal of Financial Intermediation, Elsevier, vol. 8(1-2), pages 68-89, January.
    21. Douglas W. Diamond, 1984. "Financial Intermediation and Delegated Monitoring," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 51(3), pages 393-414.
    22. Christian Keuschnigg & Søren Bo Nielsen, 2003. "Public Policy for Start-up Entrepreneurship with Venture Capital and Bank Finance," CESifo Working Paper Series 850, CESifo.
    23. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    24. repec:bla:kyklos:v:55:y:2002:i:4:p:543-62 is not listed on IDEAS
    25. Aerdt Houben & Jan Kakes, 2002. "ICT Innovation and Economic Performance: The Role of Financial Intermediation," Kyklos, Wiley Blackwell, vol. 55(4), pages 543-562, November.
    26. Jeng, Leslie A. & Wells, Philippe C., 2000. "The determinants of venture capital funding: evidence across countries," Journal of Corporate Finance, Elsevier, vol. 6(3), pages 241-289, September.
    27. Giuseppe Bruno & Riccardo De Bonis, 2009. "Do financial systems converge? New evidence from household financial assets in selected OECD countries," IFC Bulletins chapters, in: Bank for International Settlements (ed.), Proceedings of the IFC Conference on "Measuring financial innovation and its impact", Basel, 26-27 August 2008, volume 31, pages 383-401, Bank for International Settlements.
    28. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
    29. Franz Hahn, 2008. "The finance-specialization-growth nexus: evidence from OECD countries," Applied Financial Economics, Taylor & Francis Journals, vol. 18(4), pages 255-265.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Thomas Url, 2020. "Finanzmärkte 2019 durch anhaltend günstige Finanzierungsbedingungen geprägt," WIFO Monatsberichte (monthly reports), WIFO, vol. 93(4), pages 299-309, April.
    2. Heinz Hollenstein, 2013. "Wirtschaftliche Rahmenbedingungen als Element der Innovationspolitik," KOF Analysen, KOF Swiss Economic Institute, ETH Zurich, vol. 7(2), pages 47-55, June.
    3. Michael Peneder, 2013. "Von den "trockenen Tälern" der Risiko- und Wachstumsfinanzierung," WIFO Monatsberichte (monthly reports), WIFO, vol. 86(8), pages 637-648, August.
    4. Wifo, 2020. "WIFO-Monatsberichte, Heft 4/2020," WIFO Monatsberichte (monthly reports), WIFO, vol. 93(4), April.
    5. Anders Lund Hansen & Henrik Gutzon Larsen & Adam Grydehoj & Eric Clark, 2015. "Financialisation of the built environment in Stockholm and Copenhagen," Working papers wpaper115, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    6. Taylor, Benjamin & Xiao, Ning & Sikorski, Janusz & Yong, Minloon & Harris, Tom & Helme, Tim & Smallbone, Andrew & Bhave, Amit & Kraft, Markus, 2013. "Techno-economic assessment of carbon-negative algal biodiesel for transport solutions," Applied Energy, Elsevier, vol. 106(C), pages 262-274.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adeline Saillard & Thomas Url, 2011. "Venture capital in bank - and market - based economies," Documents de travail du Centre d'Economie de la Sorbonne 11025, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    2. Adeline Saillard & Thomas Url, 2011. "Venture Capital in Bank- and Market-based Economies," WIFO Working Papers 389, WIFO.
    3. Brown, James R. & Martinsson, Gustav & Petersen, Bruce C., 2017. "Stock markets, credit markets, and technology-led growth," Journal of Financial Intermediation, Elsevier, vol. 32(C), pages 45-59.
    4. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.
    5. Christian Keuschnigg, 2003. "Optimal Public Policy For Venture Capital Backed Innovation," University of St. Gallen Department of Economics working paper series 2003 2003-09, Department of Economics, University of St. Gallen.
    6. Fufa, Tolina & Kim, Jaebeom, 2018. "Stock markets, banks, and economic growth: Evidence from more homogeneous panels," Research in International Business and Finance, Elsevier, vol. 44(C), pages 504-517.
    7. Adeline Saillard & Thomas Url, 2013. "Measuring and Testing Complementarity and Co-evolution in Financial Systems," WIFO Working Papers 457, WIFO.
    8. Kaplan, Steven & Strömberg, Per, 2002. "Characteristics, Contracts and Actions: Evidence from Venture Capitalist Analyses," CEPR Discussion Papers 3243, C.E.P.R. Discussion Papers.
    9. Ghulam Mujtaba Chaudhary & Zaheer Abbas & Jamshed Khurshid Meer, 2018. "Comparative Analysis Of Financial Systems In Context Of Global Financial Crisis," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(1), pages 95-109.
    10. Ghulam Mujtaba Chaudhary & Zaheer Abbas & Jamshed Khurshid Meer, 2018. "Comparative Analysis Of Financial Systems In Context Of Global Financial Crisis," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 14(1), pages 14-18.
    11. Peia, Oana & Roszbach, Kasper, 2015. "Finance and growth: Time series evidence on causality," Journal of Financial Stability, Elsevier, vol. 19(C), pages 105-118.
    12. Sau Lino, 2007. "New Pecking Order Financing for Innovative Firms: an Overview," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200702, University of Turin.
    13. Ali-Yrkkö, Jyrki & Hyytinen, Ari & Liukkonen, Johanna, 2001. "Exiting Venture Capital Investments: Lessons from Finland," Discussion Papers 781, The Research Institute of the Finnish Economy.
    14. Kaplan, Steven N. & Strömberg, Per, 2002. "Characteristics, Contracts and Actions: Evidence From Venture Capitalist Analyses," Working Papers 186, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    15. Beck Thorsten & Büyükkarabacak Berrak & Rioja Felix K. & Valev Neven T., 2012. "Who Gets the Credit? And Does It Matter? Household vs. Firm Lending Across Countries," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(1), pages 1-46, March.
    16. Beck, Thorsten, 2006. "Creating an efficient financial system : challenges in a global economy," Policy Research Working Paper Series 3856, The World Bank.
    17. Allen, Franklin & Bartiloro, Laura & Gu, Xian & Kowalewski, Oskar, 2018. "Does economic structure determine financial structure?," Journal of International Economics, Elsevier, vol. 114(C), pages 389-409.
    18. Levine, Ross, 2002. "Bank-Based or Market-Based Financial Systems: Which Is Better?," Journal of Financial Intermediation, Elsevier, vol. 11(4), pages 398-428, October.
    19. Christian Keuschnigg, 2003. "Public Policy and Venture Capital Backed Innovation," CESifo Working Paper Series 1066, CESifo.
    20. Xun Wang, 2023. "Stock market, credit market, and heterogeneous innovations," International Review of Finance, International Review of Finance Ltd., vol. 23(1), pages 103-129, March.

    More about this item

    Keywords

    Capital-risque; structure financière; données de panel.; Venture capital; financial market structure; local stock markets; panel data.;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:cesptp:halshs-00593962. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.