Are Venture Capitalists a Catalyst for Innovation?

20 Pages Posted: 2 Jan 2009

See all articles by Stefano Caselli

Stefano Caselli

Bocconi University - Department of Finance

Stefano Gatti

Bocconi University - Department of Finance

Francesco Perrini

Bocconi University - Department of Management and Technology

Abstract

In this paper we test two hypotheses concerning the presence of innovation in venture capital investments and the growth of innovative venture backed firms. To examine these hypotheses we considered sample of 37 Italian venture backed firms that went public on the Italian Stock Exchange between 1995 and 2004 and by a statistical matching procedure we picked 37 twin firms among the non-venture backed IPOs for the same period. Our evidence shows that innovation is an important factor during the selection phase but once the investment is made, the company does not promote continued innovation and concentrates all efforts to improve other economic and managerial aspects.

Suggested Citation

Caselli, Stefano and Gatti, Stefano and Perrini, Francesco, Are Venture Capitalists a Catalyst for Innovation?. European Financial Management, Vol. 15, Issue 1, pp. 92-111, January 2009. Available at SSRN: https://ssrn.com/abstract=1320702 or http://dx.doi.org/10.1111/j.1468-036X.2008.00445.x

Stefano Caselli (Contact Author)

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Stefano Gatti

Bocconi University - Department of Finance ( email )

Via Roentgen 1
Milano, MI 20136
Italy

Francesco Perrini

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

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