The Contribution of Private Equity and Venture Capital to Employment in Europe (Der Beitrag Von Private Equity Und Venture Capital Zur Beschäftigung in Europa)

Finanz Betrieb, Vol. 8, No. 3, pp. 140-147, 2006

7 Pages Posted: 23 Apr 2008 Last revised: 10 Jul 2008

See all articles by Ann‐Kristin Achleitner

Ann‐Kristin Achleitner

Technische Universität München - Center for Entrepreneurial and Financial Studies

Annabell Geidner

Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies (CEFS)

Oliver Kloeckner

Technische Universität München - Center for Entrepreneurial and Financial Studies

Abstract

Despite considerable interest of the general public, the effects of private equity and venture capital investments on employment are not well understood. This study aims at investigating into the scope of total employment in these companies, employment development over the last years and quality of the jobs in venture capital-backed companies. Therefore, the Center for Entrepreneurial and Financial Studies (CEFS) conducted a survey among portfolio companies of private equity companies and venture capitalists. With the support of the European Venture Capital and Private Equity Association (EVCA), 213 responses could be collected.

The results of the study show that companies backed by venture capital or private equity make a significant contribution to employment in Europe. These companies employ about 5.5 million people that represent 3% of the economically active population. Sample companies financed through venture capital and private equity showed between 1997 and 2004 significantly higher average annual growth rates of employment than the aggregated, comparable rate for the 25 countries of the European Union between 2000 and 2004. Especially small companies as well as family businesses exhibited strong growth. The study also shows that R&D investments in venture capital-financed companies mostly created jobs with a high qualification profile.

The document was made available by courtesy of the publisher Fachverlag der Verlagsgruppe Handelsblatt.

Note: Downloadable document is in German.

JEL Classification: M13, G24, E24, O30, O34

Suggested Citation

Achleitner, Ann-Kristin and Geidner, Annabell and Kloeckner, Oliver, The Contribution of Private Equity and Venture Capital to Employment in Europe (Der Beitrag Von Private Equity Und Venture Capital Zur Beschäftigung in Europa). Finanz Betrieb, Vol. 8, No. 3, pp. 140-147, 2006, Available at SSRN: https://ssrn.com/abstract=1122290

Ann-Kristin Achleitner

Technische Universität München - Center for Entrepreneurial and Financial Studies ( email )

Arcisstr. 21
Munich, D-80290
Germany
+49 89 289 25181 (Phone)

Annabell Geidner

Technische Universität München (TUM) - Center for Entrepreneurial and Financial Studies (CEFS) ( email )

Arcisstr. 21
Munich, 80333
Germany

Oliver Kloeckner (Contact Author)

Technische Universität München - Center for Entrepreneurial and Financial Studies ( email )

Arcisstr. 21
Munich, 80333
Germany

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