Explaining Returns on Venture Capital-Backed Companies: Evidence from Belgium
Research in International Business and Finance 25 (2011) 277–295
Posted: 23 Dec 2014
Date Written: February 14, 2011
Using a unique database of 990 VC-backed Belgian firms, we study whether compatibility between corporate and environmental characteristics matters. We address two questions: (i) Does the interplay of company, industry, and product factors affect the expected returns of the VC-backed firms? (ii) Does the joint compatibility between these factors results in a non-linear increase in performance? Panel data analysis shows a significant influence of factor compatibility on returns. Quantile regression analysis indicates a non-linear relationship between the return and its determinants. Conjoint analysis identifies certain combinations of factors, which collapse into classifiable patterns described in the strategic management literature.
Keywords: Venture Capital, Return, Strategy, Entrepreneurship, Life Cycle, Compatibility
JEL Classification: L22, L25, M13, G30
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