Capital Supply Channel through Venture Capitals: Evidence from matched data

Daisuke Miyakawa and Miho Takizawa

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This paper examines the impact of venture capital firms' (VCs) characteristics on their capital (i.e., fund) supply and how such an impact interacts with the dynamics of public equity markets. To this end, we use a unique dataset consisting of around 6,000 pairs of venture companies and VCs match-level dataset in Japan, which covers around 2,600 unlisted companies and 600 VCs. This match-level panel dataset allows us to control for companies' time-varying unobservable capital demand, so that we can identify the effects of VCs' characteristics on their capital supply and how such effects vary as public equity markets fluctuate. The estimation results indicate that VCs with larger past investment experiences tend to supply more capital to their portfolio companies. Furthermore, such positive impact of VCs' experience on the capital supply became larger (smaller) when public equity markets were in their downturn (upturn). We also confirm that omitting firms' fund demand leads to substantial overestimation of these impacts.

Pages: 32 pages
Date: 2015-12
New Economics Papers: this item is included in nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/15e141.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:15141

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().