We aim to ascertain to what extent the better performance of European venture capital (VC)- backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms’ productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors 'imprint' the portfolio firm.
Croce, A., Martí, J., Murtinu, S., The impact of venture capital on the productivity growth of European entrepreneurial firms: ‘Screening’ or ‘value added’ effect?, <<JOURNAL OF BUSINESS VENTURING>>, 2013; 28 (4): 489-510. [doi:10.1016/j.jbusvent.2012.06.001] [http://hdl.handle.net/10807/66503]
The impact of venture capital on the productivity growth of European entrepreneurial firms: ‘Screening’ or ‘value added’ effect?
Murtinu, Samuele
2013
Abstract
We aim to ascertain to what extent the better performance of European venture capital (VC)- backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms’ productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors 'imprint' the portfolio firm.
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