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|Title: ||The Determinants of Venture Capital in Europe—Evidence Across Countries|
|Authors: ||Félix, Elisabete G.S.|
Pires, Cesaltina Pacheco
Gulamhussen, Mohamed Azzim
|Keywords: ||Venture capital|
Venture capital determinants
|Issue Date: ||2012|
|Abstract: ||Abstract This article analyses the determinants of European venture capital activity.
The main novelty of our work is in accounting for the idiosyncrasies of the European
venture capital market. In particular, we investigate whether the size of the merger
and acquisition market (M&A) is important in explaining venture capital. Moreover,
our work is the first that analyses the impact of the degree of information asymmetry
at the macro level, the direct impact of the level of entrepreneurial activity and the
impact of the unemployment rate on venture capital activity. We use aggregate data
from 23 European countries for the period 1998–2003 to estimate panel data models
with fixed and random effects. Our results reveal that the size of the M&A market
and the market-to-book ratio have a positive impact on venture capital activity
whereas the unemployment rate influences the venture capital market negatively.
These results highlight the importance of the exit environment and of the degree of
asymmetric information for the venture capital market.|
|Appears in Collections:||CEFAGE - Publicações - Artigos em Revistas Internacionais Com Arbitragem Científica|
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