Financing High-Tech Growth: The Role of Banks and Venture Capitalists

Schmalenbach Business Review, Vol. 56, October 2004

19 Pages Posted: 11 Dec 2004  

David B. Audretsch

Indiana University - Institute for Development Strategies; King Saud University; WHU - Otto Beisheim School of Management; Indiana University Bloomington - School of Public & Environmental Affairs (SPEA)

Erik E. Lehmann

University of Augsburg - Faculty of Business and Economics

Abstract

Using a data set of the firms listed on the Neuer Markt in Germany, we demonstrate that venture-backed firms differ from firms with other financial resources, especially debt. Thus, the results of this study support the hypothesis that small and innovative firms are more likely to be financed by venture capitalists rather than banks. We also provide evidence that the presence of venture capitalists enhance the growth rates of firms positively.

Keywords: Venture capital, new economy, entrepreneurship, corporate governance

JEL Classification: G32, L11, M13

Suggested Citation

Audretsch, David B. and Lehmann, Erik E., Financing High-Tech Growth: The Role of Banks and Venture Capitalists. Schmalenbach Business Review, Vol. 56, October 2004. Available at SSRN: https://ssrn.com/abstract=630982

David B. Audretsch (Contact Author)

Indiana University - Institute for Development Strategies ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States
812-855-6766 (Phone)
812-855-0184 (Fax)

King Saud University ( email )

Riyadh, 11451
Saudi Arabia

WHU - Otto Beisheim School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

Erik E. Lehmann

University of Augsburg - Faculty of Business and Economics ( email )

Universitätsstr. 16
Augsburg, 86135
Germany

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