Kiel Working Papers, Kiel Institute for World Economics
No 1223:
Europe's Entry into the Venture Capital Business: Efficiency and Policy
Michael Stolpe
Abstract: This paper provides new evidence on Europe's experience
with venture capital in the 1990s. Individual countries' activity is not
solely determined by country characteristics and a purely domestic history,
but also by a common European experience: the interdependence of valuations
in primary equity markets. Each country must seek to improve the efficiency
of its venture capital sector independently. Specific policies should
depend on initial conditions and on the evolution of micro-efficiency.
Initial public offerings backed by venture capital provide the appropriate
window to look at the relative efficiency of individual venture capital
organizations and their learning process over time. This paper is part of
the international research programme on European Integration, Financial
Systems and Corporate Performance (EIFC) carried out within the European
Commission's specific programme "Improving the Human Research Potential and
the Socio-Economic Knowledge Base". A first draft was discussed at the
final EIFC programme workshop held on February 23, 2004, at the Kiel
Institute for World Economics. Helpful comments from Douglas J. Cumming and
other workshop participants as well as financial support from the European
Union, DG Research (Contract No. HPSE—CT—1999—00039), are gratefully
acknowledged. The project homepage is maintained by Anthony Bartzokas at
www.intech.unu.edu/whoswho/index.htm.
Keywords: Venture capital, New technology-based firms, Initial public offerings, Underpricing, Social multiplier; (follow links to similar papers)
JEL-Codes: G14,; G15,; G18; (follow links to similar papers)
78 pages, August 2004
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