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Financing High-Tech Growth: The Role of Banks and Venture Capitalists

David B. Audretsch
Max Planck Institute of Economics; Indiana University - Institute for Development Strategies; Centre for Economic Policy Research (CEPR)

Erik E. Lehmann
University of Augsburg - Faculty of Business and Economics

Schmalenbach Business Review, Vol. 56, October 2004

Abstract:
Using a data set of the firms listed on the Neuer Markt in Germany, we demonstrate that venture-backed firms differ from firms with other financial resources, especially debt. Thus, the results of this study support the hypothesis that small and innovative firms are more likely to be financed by venture capitalists rather than banks. We also provide evidence that the presence of venture capitalists enhance the growth rates of firms positively.

Keywords: Venture capital, new economy, entrepreneurship, corporate governance

JEL Classifications: G32, L11, M13

Accepted Paper Series

Date posted: December 11, 2004 ; Last revised: March 08, 2005

Suggested Citation

Audretsch, David B. and Lehmann, Erik E., Financing High-Tech Growth: The Role of Banks and Venture Capitalists. Schmalenbach Business Review, Vol. 56, October 2004. Available at SSRN: http://ssrn.com/abstract=630982

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Contact Information

David B. Audretsch (Contact Author) Max Planck Institute of Economics ( email ) Kahlaische Strasse 10 D-07745 Jena Germany
Indiana University - Institute for Development Strategies ( email ) 1315 East Tenth Street Bloomington, IN 47405 United States 812-855-6766 (Phone) 812-855-0184 (Fax)
Centre for Economic Policy Research (CEPR) 90-98 Goswell Road London EC1V 7RR United Kingdom
Erik E Lehmann University of Augsburg - Faculty of Business and Economics ( email ) 86135 Augsburg Germany