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Interdependencies between Technology and Capacity Investments in the Solar Technology Sector

35 Pages Posted: 27 Sep 2014  

Florian Schock

EBS Universität für Wirtschaft und Recht - EBS Business School

Jan Mutl

EBS Universität für Wirtschaft und Recht - EBS Business School

Florian A. Täube

Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, iCite

Paschen von Flotow

Sustainable Business Institute (SBI)

Date Written: August 24, 2014

Abstract

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

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

Florian Schock

EBS Universität für Wirtschaft und Recht - EBS Business School ( email )

Gustav-Stresemann-Ring 3
65189 Wiesbaden, Hessen
Germany

Jan Mutl

EBS Universität für Wirtschaft und Recht - EBS Business School ( email )

Gustav-Stresemann-Ring 3
65189 Wiesbaden, Hessen
Germany

Florian A. Täube (Contact Author)

Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, iCite ( email )

19 Av Franklin Roosevelt
1050
Brussels
Belgium

HOME PAGE: http://www.solvay.edu

Paschen Von Flotow

Sustainable Business Institute (SBI) ( email )

Burgstr. 4
Oestrich-Winkel, 65375
Germany

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