High-tech entrepreneurial firms’ innovation in different institutional settings. Do venture capital and private equity have complementary or substitute effects?

Christian Corsi and Antonio Prencipe

Industry and Innovation, 2019, vol. 26, issue 9, 1023-1074

Abstract: The paper explores whether venture capital (VC) and private equity (PE) investments have complementary or substitute effects on innovation in high-tech entrepreneurial firms in different institutional settings, focusing on different levels of capital market development, entrepreneurial culture, and intellectual property rights protection. Using a panel sample of 326 firms from 12 EU countries observed from 2009–2013, the empirical results show that the VC/PE effect on high-tech entrepreneurial firms’ innovation is stronger in countries with a less-developed capital market. This suggests that VC/PE investments play a substitute role. A partial substitute role of VC/PE is also detected in firms located in countries with a low entrepreneurial culture. However, no significant evidence emerged regarding the level of protection of intellectual property rights. The results are generally robust to various econometric specifications. The implications of the resulting framework, the study’s limitations, and opportunities for further research are also discussed.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1080/13662716.2018.1561358 (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:indinn:v:26:y:2019:i:9:p:1023-1074

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/CIAI20

DOI: 10.1080/13662716.2018.1561358

Access Statistics for this article

Industry and Innovation is currently edited by Associate Professor Mark Lorenzen

More articles in Industry and Innovation from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().