Kiel Working Papers, Kiel Institute for World Economics
No 1156:
Learning and Signalling in the French and German Venture Capital Industries
Michael Stolpe
Abstract: This paper analyses the efficiency of venture capital and
its impact on primary equity markets in France and Germany. It shows that
venture capital operates according to the signalling model in France and
according to the learning model in Germany. Only the learning model can
serve as a rationale for government subsidies. In the signalling model,
many young venture capital firms succeed without a protected learning
period because they already excel in the screening, monitoring and
management supporting services they provide. They will seek to signal their
quality to outsiders by taking portfolio firms public early. A variety of
empirical tests and policy implications are discussed.
Keywords: venture capital, initial public offerings, underpricing, learning-by-doing, signalling, new technology-based firms; (follow links to similar papers)
JEL-Codes: G14; G15; G18; (follow links to similar papers)
99 pages, April 2003
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