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Distribution dynamics in European venture capital

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  • Stolpe, Michael
Abstract
This paper evaluates the evolution of European venture capital investments since 1990, using the distribution dynamics methodology. It tests and rejects the hypothesis that the international allocation of venture capital investments is driven by a pathdependent process of agglomeration, in which a country's initial advantage is transformed into a long-term lead. Instead, the evidence from a cross section of 13 European countries is more favourable for the alternative hypothesis, which explains international variations in venture capital investments as part of countries' different patterns of specialization. The robustness of these findings and implications for government policy are discussed.

Suggested Citation

  • Stolpe, Michael, 2003. "Distribution dynamics in European venture capital," Kiel Working Papers 1191, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1191
    as

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    File URL: https://www.econstor.eu/bitstream/10419/3132/1/kap1191.pdf
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    References listed on IDEAS

    as
    1. Stolpe, Michael, 1995. "Technology and the dynamics of specialization in open economies," Open Access Publications from Kiel Institute for the World Economy 738, Kiel Institute for the World Economy (IfW Kiel).
    2. Schertler, Andrea & Stolpe, Michael, 2000. "Venture mania in Europe: Its causes and consequences," Kiel Discussion Papers 358, Kiel Institute for the World Economy (IfW Kiel).
    3. Maria Luisa Mancusi, 2003. "Geographical concentration and the dynamics of countries' specialization in technologies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(3), pages 269-291.
    4. James M. Poterba, 1989. "Venture Capital and Capital Gains Taxation," NBER Chapters, in: Tax Policy and the Economy, Volume 3, pages 47-68, National Bureau of Economic Research, Inc.
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    6. Bygrave, William D., 1987. "Syndicated investments by venture capital firms: A networking perspective," Journal of Business Venturing, Elsevier, vol. 2(2), pages 139-154.
    7. Black, Bernard S. & Gilson, Ronald J., 1998. "Venture capital and the structure of capital markets: banks versus stock markets," Journal of Financial Economics, Elsevier, vol. 47(3), pages 243-277, March.
    8. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    9. 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.
    10. Quah, D., 1990. "Galton'S Fallacy And The Tests Of The Convergence Hypothesis," Working papers 552, Massachusetts Institute of Technology (MIT), Department of Economics.
    11. Leleux, Benoit & Surlemont, Bernard, 2003. "Public versus private venture capital: seeding or crowding out? A pan-European analysis," Journal of Business Venturing, Elsevier, vol. 18(1), pages 81-104, January.
    12. Schertler, Andrea, 2002. "Path dependencies in venture capital markets," Kiel Working Papers 1120, Kiel Institute for the World Economy (IfW Kiel).
    13. Geweke, John & Marshall, Robert C & Zarkin, Gary A, 1986. "Mobility Indices in Continuous Time Markov Chains," Econometrica, Econometric Society, vol. 54(6), pages 1407-1423, November.
    14. repec:bla:scandj:v:95:y:1993:i:4:p:427-43 is not listed on IDEAS
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    Cited by:

    1. Li Yao & Jie Lu & Pingjun Sun, 2019. "Venture Capital and Industrial Structure Upgrading from the Perspective of Spatial Spillover," Sustainability, MDPI, vol. 11(23), pages 1-16, November.

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    More about this item

    Keywords

    Distribution dynamics; Markov chains; New technology-based firms; Venture capital;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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