The Effect of Venture Capital on Innovation Strategies
Marco Da Rin () and
María Penas ()
No 13636, NBER Working Papers from National Bureau of Economic Research, Inc
We examine a unique dataset of Dutch companies, some of which have received venture financing. The data include detailed information on innovation activities and other company characteristics. We analyse the role of venture finance in influencing innovation strategies. We find that venture capitalists push portfolio companies towards building absorptive capacity and towards more permanent in-house R&D efforts. By contrast, we find that public funding relaxes financial constraints, but does not lead to a build-up of absorptive capacity. Our results thus highlight the special role of venture capital in shaping companies' innovation strategies.
JEL-codes: G24 O32 O38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-cse, nep-ent, nep-ino, nep-ipr and nep-pr~
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Published as Entrepreneurial Financing, Advice, and Agency Costs , Roland Strausz. in Entrepreneurship: Strategy and Structure , Hellmann and Stern. 2009
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