Working Paper: CEPR ID: DP3656
Authors: David B. Audretsch; Erik Lehmann
Abstract: Using a dataset of the firms listed on the Neuer Markt in Germany, this Paper demonstrates that venture backed firms differ from firms with other financial resources, especially debt. Thus, the results of this study provide evidence for the hypothesis that small and innovative firms are more likely to be financed by venture capitalists instead of banks. We also provide evidence that the presence of venture capitalists enhances the growth rates of firms positively.
Keywords: Corporate Governance; Entrepreneurship; New Economy; Venture Capital
JEL Codes: G32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher debt financing (G32) | Lower likelihood of receiving venture capital (G24) |
| Venture capital (G24) | Higher likelihood of obtaining financial resources (I22) |
| Venture capital (G24) | Higher post-IPO growth rates (D25) |
| Educational background of board of directors (M14) | Higher likelihood of obtaining venture capital (G24) |
| Educational background of board of directors (M14) | Amount of venture capital received (G24) |
| Venture capital ownership (G24) | Growth rates in lower-performing firms (L25) |