Firm Level Implications of Early Stage Venture Capital Investment - an Empirical Investigation

Engel, Dirk; Keilbach, Max

doi:10.2139/ssrn.392925

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Firm Level Implications of Early Stage Venture Capital Investment - an Empirical Investigation

ZEW Discussion Paper No. 02-82

Journal of Empirical Finance, Vol. 14, No. 2, pp. 150-167, 2007

24 Pages Posted: 4 Jun 2003 Last revised: 24 Feb 2015

See all articles by Dirk Engel

Dirk Engel

University of Applied Sciences Stralsund; Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Max Keilbach

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics

Date Written: 2002

Abstract

The paper analyses the impact of venture capital finance on growth and innovation activities of young German firms. Among other variables, our panel of firm data includes data on venture capital funding and patent applications. With a statistical matching procedure we draw an adequate control group of non venture funded firms. The analysis gives evidence that innovative firms will be able to close a venture capital deal with higher probability. Once the firms are venture funded, they display higher growth rates but do not differ in their innovative output from otherwise comparable firms. We derive strategic implications.

Keywords: Firm Demography, Firm Start-Ups, Firm Growth, Venture Capital, Patented Inventions, Microeconometric Evaluation Methods

JEL Classification: L21, D21, D92, C14, C33

Suggested Citation: Suggested Citation

Engel, Dirk and Keilbach, Max, Firm Level Implications of Early Stage Venture Capital Investment - an Empirical Investigation (2002). ZEW Discussion Paper No. 02-82, Journal of Empirical Finance, Vol. 14, No. 2, pp. 150-167, 2007, Available at SSRN: https://ssrn.com/abstract=392925 or http://dx.doi.org/10.2139/ssrn.392925