How Does Governmental versus Private Venture Capital Backing Affect a Firm's Efficiency? Evidence from Belgium
Posted: 28 Mar 2015 Last revised: 19 May 2015
Date Written: November 19, 2014
We investigate the implications of venture capital (VC) investor type (government or private) on the operating efficiency of a sample of 515 Belgian portfolio firms up to 3 years after the investment. We find that the government VC-backed firms display significant reductions in productivity. No significant differences in efficiency are found in firms backed by private VC compared with their non-VC-backed peers. Finally, significant reductions in efficiency exist in targets of government VC compared to their non-VC-backed peers.
Keywords: Venture capital; Efficiency; Data envelopment analysis; Fund type; Public investor
JEL Classification: G24, G30, M13, O16
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