35 Pages Posted: 27 Sep 2014
Date Written: August 24, 2014
The impact of venture capital (VC) investment on innovation and technology commercialization as well as the influence of market capacity on venture capital firm decision-making has been extensively covered by the existing literature. However, the interdependency between investment that drives technology and investment that drives market capacity has received relatively little attention. Whereas literature suggests that VC investment in technology companies strengthens technology and/or manufacturing efficiency, asset finance investment drives capacity growth and volume in certain technology sectors. We examine interdependencies in investment in technology and capacity by analyzing the relationship between VC investment in solar technology firms and asset finance investment in solar power infrastructure capacity in the US. We find that investment in solar technology drives investment in solar capacity; however, we find no evidence that market growth caused by solar capacity investment induced follow-on investment by solar technology venture capitalists in the US.
Keywords: Venture Capital, Asset Finance, Infrastructure Finance, Solar Technology, Renewable Energy, VAR Analysis
JEL Classification: G24, Q21, Q42, Q55
Suggested Citation: Suggested Citation
Schock, Florian and Mutl, Jan and Täube, Florian A. and von Flotow, Paschen, Interdependencies between Technology and Capacity Investments in the Solar Technology Sector (August 24, 2014). Available at SSRN: https://ssrn.com/abstract=2501857 or http://dx.doi.org/10.2139/ssrn.2501857