Venture Capital Investments, Mergers and Competition Laws around the World

69 Pages Posted: 20 Nov 2017 Last revised: 11 Nov 2019

See all articles by Gordon M. Phillips

Gordon M. Phillips

Dartmouth College - Tuck School of Business; National Bureau of Economic Research (NBER)

Alexei Zhdanov

Pennsylvania State University

Multiple version iconThere are 2 versions of this paper

Date Written: June 16, 2018

Abstract

We examine the relation between venture capital (VC) investments, M&A activity, and merger competition laws in 48 countries around the world. We find evidence of a strong positive association between VC investments and lagged M&A activity, consistent with the hypothesis that an active M&A market provides viable exit opportunities for VC companies and therefore incentivizes them to engage in more deals. We also explore the effects of country-level merger competition laws and also pro-takeover legislation passed internationally on VC activity. We find significant reductions in VC activity in countries with stricter competition laws and find that VC activity intensifies after enactment of country-level takeover-friendly legislation.

Keywords: Venture Capital, Mergers and Acquisitions, Merger Waves, Takeover Laws

JEL Classification: G15, G24, G33

Suggested Citation

Phillips, Gordon M. and Zhdanov, Alexei, Venture Capital Investments, Mergers and Competition Laws around the World (June 16, 2018). Tuck School of Business Working Paper No. 3072665, Available at SSRN: https://ssrn.com/abstract=3072665 or http://dx.doi.org/10.2139/ssrn.3072665

Gordon M. Phillips (Contact Author)

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Alexei Zhdanov

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

HOME PAGE: http://www.alexeizhdanov.com

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