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High-tech entrepreneurial ventures seeking external equity: whether, when, where… and why not?

Anita Quas () and Diego D’Adda ()
Additional contact information
Anita Quas: Emlyon Business School
Diego D’Adda: Universitá Politecnica delle Marche

Economia e Politica Industriale: Journal of Industrial and Business Economics, 2018, vol. 45, issue 3, No 1, 334 pages

Abstract: Abstract In this paper, we study the demand of high-tech entrepreneurial ventures for external equity, revealing the conditions that determine whether, when and where they decide to seek external equity during their lives. We also provide evidence on the most important reasons for not looking for external equity at all. We focus on a sample of 530 high-tech entrepreneurial ventures located in 7 European countries and founded between 1984 and 2009. We reveal that company-level characteristics, namely the human capital, the innovativeness, the size, the asset intangibility, and the alternatives to equity capital (internal cash flows and debt) determine whether, when (i.e., at what age) and when (i.e., in international or domestic markets) companies seek external equity. Industry- and country-level variables also play a secondary role in explaining high-tech entrepreneurial ventures’ demand for external equity.

Keywords: High-tech entrepreneurial ventures; Demand for external equity; Human capital; Innovativeness; External financing (search for similar items in EconPapers)
JEL-codes: L26 G24 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1007/s40812-018-0094-0

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Economia e Politica Industriale: Journal of Industrial and Business Economics is currently edited by C. Cambini, M.G. Colombo, L. Piscitello, L. Rondi and A. Zanfei

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