The Impact of Venture Capital on the Productivity Growth of European Entrepreneurial Firms: 'Screening' or 'Value added' Effect?

75 Pages Posted: 9 Nov 2010 Last revised: 19 Jan 2018

See all articles by Annalisa Croce

Annalisa Croce

Polytechnic University of Milan - Dipartimento di Economia e Produzione

José Martí

Universidad Complutense de Madrid - Department of Accounting and Finance

Samuele Murtinu

University of Groningen

Date Written: May 16, 2013

Abstract

We aim to ascertain to what extent the better performance of European venture capital (VC)-backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms’ productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors 'imprint' the portfolio firm.

Keywords: venture capital, entrepreneurial firms, productivity, screening, value added, imprinting effect

JEL Classification: G24, D24, M13, C23

Suggested Citation

Croce, Annalisa and Martí Pellón, José and Murtinu, Samuele, The Impact of Venture Capital on the Productivity Growth of European Entrepreneurial Firms: 'Screening' or 'Value added' Effect? (May 16, 2013). Croce, A., Martí, J., Murtinu, S. (2013). The Impact of Venture Capital on the Productivity of European High-Tech Firms: Screening or Value Added Effect?.. Available at SSRN: https://ssrn.com/abstract=1705225 or http://dx.doi.org/10.2139/ssrn.1705225

Annalisa Croce

Polytechnic University of Milan - Dipartimento di Economia e Produzione ( email )

Piazza Leonardo da Vinci, 32
Milan, 20133
Italy

José Martí Pellón

Universidad Complutense de Madrid - Department of Accounting and Finance ( email )

Carretera de Humera s/n
Madrid 28223, Madrid 28223
Spain
+ 3491 3942310 (Phone)
+ 34 91 3942534 (Fax)

Samuele Murtinu (Contact Author)

University of Groningen ( email )

Postbus 72
9700 AB Groningen
Netherlands

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