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Firm Level Implications of Early Stage Venture Capital Investment: An Empirical Investigation

Author

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  • Keilbach, Max
  • Engel, Dirk
Abstract
The paper analyses the impact of venture capital finance on growth and innovation activities of young German firms. Among other variables, our panel of firm data includes data on venture capital funding and patent applications. With a statistical matching procedure we draw an adequate control group of non venture funded firms. The analysis gives evidence that innovative firms will be able to close a venture capital deal with higher probability. Once the firms are venture funded, they display higher growth rates but do not differ in their innovative output from otherwise comparable firms. We derive strategic implications.

Suggested Citation

  • Keilbach, Max & Engel, Dirk, 2002. "Firm Level Implications of Early Stage Venture Capital Investment: An Empirical Investigation," ZEW Discussion Papers 02-82, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:1336
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Firm Demography; Firm Start-Ups; Firm Growth; Venture Capital; Patented Inventions; Microeconometric Evaluation Methods;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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