Unbiased Estimation of Economic Impact of Venture Capital Backed Firms

33 Pages Posted: 12 Mar 2005

See all articles by Luisa Alemany

Luisa Alemany

London Business School

José Martí

Universidad Complutense de Madrid - Department of Accounting and Finance

Date Written: March 2005

Abstract

One of the pending issues in venture capital (VC) research is the analysis of the economic impact of the companies that receive venture funds as part of their financing. This paper analyses a sample of VC-backed firms to study their economic impact, in terms of growth in employment, sales, gross margin, total assets, net intangible assets and corporate taxes paid. The results are compared to a control group. Additionally, panel data methodology is applied to verify the significant effect observed over time on the variables analysed. The evidence suggests that VC-backed companies have a greater economic impact and that VC funding has a significant and positive effect on this impact.

Keywords: Venture Capital, impact, entrepreneurial finance, growth of the firm, job creation

JEL Classification: G24, M13, O31

Suggested Citation

Alemany, Luisa and Martí Pellón, José, Unbiased Estimation of Economic Impact of Venture Capital Backed Firms (March 2005). Available at SSRN: https://ssrn.com/abstract=673341 or http://dx.doi.org/10.2139/ssrn.673341

Luisa Alemany (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

José Martí Pellón

Universidad Complutense de Madrid - Department of Accounting and Finance ( email )

Carretera de Humera s/n
Madrid 28223, Madrid 28223
Spain
+ 3491 3942310 (Phone)
+ 34 91 3942534 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1,199
Abstract Views
5,041
Rank
27,396
PlumX Metrics