New technology-based firms in Europe: market penetration, public venture capital, and timing of investment

Grilli, Luca; Murtinu, Samuele

doi:10.1093/icc/dtu025

Cited by 89 publications

(24 citation statements)

References 99 publications

(96 reference statements)

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“…More interestingly, our analysis also shows that VC supply‐side thinness is responsible (at least to some extent) for slow demand‐side dynamics, justifying public policies aimed at sustaining the VC supply to trigger a virtuous cycle between the two sides of the market. Recent contributions have highlighted a positive role of government‐sponsored programs in the VC industry to the extent that policy intervention is willing to complement and increase private investment rather than play a leading role in the choice of the targets and the active management of investments (e.g., Bertoni & Tykvová, ; Brander, Du, & Hellmann, ; Brander, Egan, & Hellmann, ; Grilli & Murtinu, , ). The set‐up of hybrid public‐private funds, with the public actor playing a facilitating role rather than a leading one, may indeed increase the thickness of VC markets by acting as a pole of attraction for the supply of (internationally qualified) private VC investors.…”

Section: Discussionmentioning

confidence: 99%

Self‐selection of entrepreneurial firms in thin venture capital markets: Theory and empirical evidence

Bertoni

D'Adda

Grilli

2018

Strategic Entrepreneurship

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Research Summary: We develop a two-step selection model between entrepreneurial ventures and venture capital (VC) investors in a thin VC market. The model predicts that in a thin VC market, the availability of VC reduces the propensity of firms to self-select into the market for VC (demand-side selection)but not the probability that firms entering the market for VC will receive financing (supply-side selection). We test these predictions using survey-based data on 190 new technology-based firms in Italy during the late 1990s and early 2000s. The empirical evidence supports the predictions of the model.Managerial Summary: Venture capital (VC) is an important ingredient of an environment that is conducive to the birth and the growth of entrepreneurial ventures, but VC markets are often highly local and thin in terms of participants. We show that the scarcity of VC supply may cause a drop in the demand for VC because entrepreneurs, anticipating that competition for VC money will be tough, will not seek VC in the first place. The more a market is thin, the more the demand-side selection is likely to become more important than the supply-side selection of VC investors. Demand-side selection may involve a significant number of otherwise good targets for VC investment, which will not be in the radar of VC investors. In turn, this may deter new VC investors from entering the local market, thus creating a vicious cycle that raises concerns for both policy makers and VC general partners. K E Y W O R D S entrepreneurial firms, high-tech entrepreneurship, market thinness, selection, venture capital

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Section: Discussionmentioning

confidence: 99%

Self‐selection of entrepreneurial firms in thin venture capital markets: Theory and empirical evidence

Bertoni

D'Adda

Grilli

2018

Strategic Entrepreneurship

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“…This dummy variable captures whether the firm has practiced licensing as a technology buyer, that is, in the opposite fashion than the one investigated in this article. We then used the estimated coefficients of the first‐stage model to compute an adjustment term, the inverse Mills ratio corresponding to each year t , which we later inserted as control in the second‐stage panel regressions featuring licensing revenues as dependent variable (Semykina and Wooldridge, ; Grilli and Murtinu, ; Tzabbar and Kehoe, ). By accounting for the firm's likelihood to earn monetary returns from licensing each year of the dataset, this term helps minimize potential distortion in the analysis of interest and provides consistent estimates that generalize the results for the determinants of superior licensing volume to the larger sample (Dustmann and Rochina‐Barrachina, ).…”

Section: Methodsmentioning

confidence: 99%

Learning to license technology: the role of experience and workforce's skills in Spanish manufacturing firms

Bianchi

Lejarraga

2016

R & D Management

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Firms increasingly pursue technology licensing for appropriating economic returns from their R&D investments. Despite this tendency, extracting revenues from licensing remains a challenge for most firms. This article explores the role of task‐specific experience and of workforce skills as determinants of superior licensing volume. The rationale is that these factors contribute to the development of a desorptive capacity that allows companies to overcome the complexities posed by technology licensing. Using panel data of Spanish manufacturing firms, we find that prior experience in licensing positively affects licensing revenues at a decreasing rate. These learning‐by‐doing effects are strengthened when firms have a higher proportion of their workforce endowed with advanced skills, whereas they are reduced when firms have a higher proportion of low‐skilled employees. These results contribute to licensing and open innovation research by partly specifying the nature and anatomy of desorptive capacity and by highlighting the key role of intellectual human capital in licensing, whose contribution depends on the skills level. They also inform managers on the mechanisms that can enhance their firms’ licensing volume.

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“…Theoretical framework. Avnimelech and Teubal, 2006;Kenney, 2011b;Wonglimpiyarat, 2011;Revest and Sapio, 2013;Grilli and Murtinu, 2014). Critical to the development of this field is a greater understanding of how the three components of the equity finance value chain interact, particularly bringing in the perspective of the institutional investor (Brossard et al, 2013).…”

Section: Theoretical Background 21 Role Of the Finance Ecosystem Formentioning

confidence: 99%

Beyond venture capital: an exploratory study of the finance-innovation-policy nexus in cleantech

Migendt

Polzin

Schock³

et al. 2017

Industrial and Corporate Change

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In recent years, scholarly interest in financing for innovation has grown, particularly for mitigating climate change. However, extant literature has neglected the interaction of actors along the equity financing value chain, and the indirect effects of innovation and financial policy on the supply and demand of private equity (PE) and venture capital (VC). In this article, we emphasize the importance of these understudied aspects through a comparative case study of equity finance for cleantech in the United States and Germany. We find that systemic interdependencies between institutional investors, VC/PE and policy makers influence the conditions for innovation-the "finance-innovation-policy nexus." Adverse effects of policies affecting financial markets, in particular institutional investors, have to be taken into account to effectively mobilize private investments for (cleantech) innovation.

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New technology-based firms in Europe: market penetration, public venture capital, and timing of investment

Cited by 89 publications

References 99 publications

Self‐selection of entrepreneurial firms in thin venture capital markets: Theory and empirical evidence

Self‐selection of entrepreneurial firms in thin venture capital markets: Theory and empirical evidence

Learning to license technology: the role of experience and workforce's skills in Spanish manufacturing firms

Beyond venture capital: an exploratory study of the finance-innovation-policy nexus in cleantech

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