The Determinants of Private Equity Fundraising in Western Europe

Balboa, Marina; Martí, José

doi:10.2139/ssrn.269789

Cited by 17 publications

(10 citation statements)

References 22 publications

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“…Jeng and Wells (2000) analyse the determinants of venture capital for a sample of 21 countries and find that innovation is not a significant item, while the IPO opportunity represents the strongest driver of venture capital investment. Balboa and Marti (2001) try to identify the key factors that lie behind venture capital/private equity fundraising in countries where there is scarce and asymmetric information about final returns. The main contribution of their analysis is that it explains fundraising by means of variables directly related to the venture capital process rather than by variables related to the economic environment, but, in conclusion they reach the same conclusions as Jeng and Wells (2000) about the relationship between innovation and private equity investment decisions.…”

Section: Institutional Framework On Venture Capital Innovation Anmentioning

confidence: 99%

Are Venture Capitalists a Catalyst for Innovation?

Caselli

Gatti

Perrini

2008

Euro Fin Management

118

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"In this paper we test two hypotheses concerning the presence of innovation in venture capital investments and the growth of innovative venture backed firms. To examine these hypotheses we considered sample of 37 Italian venture backed firms that went public on the Italian Stock Exchange between 1995 and 2004 and by a statistical matching procedure we picked 37 twin firms among the non-venture backed IPOs for the same period. Our evidence shows that innovation is an important factor during the selection phase but once the investment is made, the company does not promote continued innovation and concentrates all efforts to improve other economic and managerial aspects". Copyright (c) 2008 The Authors Journal compilation (c) 2008 Blackwell Publishing Ltd.

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Section: Institutional Framework On Venture Capital Innovation Anmentioning

confidence: 99%

Are Venture Capitalists a Catalyst for Innovation?

Caselli

Gatti

Perrini

2008

Euro Fin Management

118

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“…Several studies have used panel data analysis to study the effects of several subsets of our variables discussed in the previous section (Félix et al ., 2013; Balboa and Martí, 2001; Bengoa and Sanchez-Robles, 2003; Bonini and Alkan, 2011; Cherif and Gazdar, 2011; Herrera-Echeverri et al ., 2014; Bedu and Montalban, 2014; Groh and Wallmeroth, 2016; Herrera-Echeverri, 2017). We use panel data analysis because of the time series and cross-sectional nature of the data collected over two decades.…”

Section: Methodsmentioning

confidence: 99%

The role of intellectual and social capital in funding businesses: a cross-country analysis

Mongrut,

Berggrun,

Cortez Alejandro

et al. 2024

ARLA

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PurposeThe study aims to examine the impact of intellectual and social capital in funding businesses.Design/methodology/approachThe study made use of fixed-effects panel data models with a sample of 142 countries from the five continents during the period 1998–2018.FindingsIt was found that human capital (HC), relational capital, structural capital and social capital play a role in investors’ decisions to fund a business. The study revealed that investors’ funding decisions in low human development index countries are based mainly on education, while those in high human development index countries are based mainly on the creativity component of HC and on relational, structural and social capital.Research limitations/implications The study needs to be replicated using firm-level data within each country. Moreover, the search for new proxies for intellectual and social capital (although the list of variables is exhaustive) both at the country and firm level, constitutes an interesting avenue for future research.Practical implicationsCountries should pay attention to intellectual and social capital to encourage business activity. In particular, low human development countries should strengthen HC, such as the school enrollment rate, with early entrepreneurial training and increase research and development investments, while high human development countries should continue to foster strategic alliances, protect intellectual property and maintain or increase the level of trust in the country.Originality/valueThe study contributes to literature by being the first to explore such a variety of intellectual and social capital variables from a country-level perspective.

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“…The most pertinent studies on this topic were conducted by Gompers and Lerner (1998), Jeng and Wells (2000), Balboa and Martí (2001), Balboa and Martí (2003), Schertler (2003) Gompers and Lerner (1998) have shown that better GDP growth, higher R&D spending, and a lower capital gains tax led to more venture capital. Jeng and Wells (2000), on the other hand, found that neither GDP growth nor market capitalization were important venture capital drivers.…”

Section: Literature Reviewmentioning

confidence: 99%

“…As demonstrated by Balboa and Martí (2001), Schertler (2003), Kelly (2012), Bernoth and Colavecchio (2014), and Henchiri (2016), most of the research examining the determinants and drivers of PE activity uses funds raised and invested as the target variables. And thus, to study the drivers of private equity, we employ these two target variables as well: Fundraising & Investments.…”

Section: Target Variablesmentioning

confidence: 99%

Drivers of Private Equity Activity across Europe: An East-West Comparison

Kočenda,

Rai

2024

Preprint

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We investigate the key macroeconomic and institutional determinants of fundraising and investment activities and compare them across Europe, covering 13 Central and Eastern European (CEE) and 16 Western European (WE) countries. Five macroeconomic variables and nineteen institutional variables are selected. These variables are studied using panel data analysis with fixed effects and random effects models over an eleven-year observation period (2010–2020). Bayesian Model Averaging (BMA) is applied to select the key variables. Our results suggest that macroeconomic variables have no significant impact on fundraising and investment activity in either region. Investment activity is a significant driver of fundraising across Europe. Similarly, fundraising and divestment activity are significant drivers of investments across Europe. Institutional variables, however, affect fundraising and investment activity differently. While investment freedom has a significant effect on funds raised in the WE and CEE countries, government integrity and trade freedom are both significant determinants of investments in both European regions. In addition, the results demonstrate that, in contrast to the WE region, fundraising in the CEE region is not country specific. JEL Classifications: C11, C23, C52, E22, G15, G24, G28, O16

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The Determinants of Private Equity Fundraising in Western Europe

Cited by 17 publications

References 22 publications

Are Venture Capitalists a Catalyst for Innovation?

Are Venture Capitalists a Catalyst for Innovation?

The role of intellectual and social capital in funding businesses: a cross-country analysis

Drivers of Private Equity Activity across Europe: An East-West Comparison

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