What kind of German biotechnology start-ups do venture capital companies and corporate investors prefer for equity investments?

Claire Champenois, Dirk Engel and Oliver Heneric

Applied Economics, 2006, vol. 38, issue 5, 505-518

Abstract: The paper deals with the role played by private equity investors (venture capital companies and corporate investors) in the emergence of a new biotechnology industry in Germany in the second half of the 90's. Our analysis takes into account the different business models and business fields to be found in the biotechnology industry. Based on theoretical arguments, a great relevance of venture capital companies (VCC) in financing young innovative biotechnology firms developing health care applications and technology platforms is expected, whereas corporate investors like incumbents in pharmaceutical and chemical industries may play a more important role in financing supplier companies. The empirical analysis is based on 378 biotechnology firms, founded between 1995 and 1999. Descriptive results emphasize a crucial importance of the access to venture capital provided by venture capital companies: VCC are venturing partner of 42 percent of healthcare developer in their early stage. Opposite to that, corporate investors are marginally involved as venturing partner of high risk projects. The observed pattern also holds in a multivariate analysis which controls for some core variables as determinants of equity funding. The result for corporate investors differs from observations in the US for collaborative arrangements. Therefore, country specific settings may matter.

Date: 2006
References: View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036840500391146 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:38:y:2006:i:5:p:505-518

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036840500391146

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().