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The Birth of German Biotechnology Industry: Did Venture Capital run the Show?

Oliver Heneric, Dirk Engel and Claire Champenois

No 04-09, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The goal of this paper is to point out 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. This 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 VC-companies in financing young innovative biotechnology firms developing health care applications and technology platforms is expected, whereas corporate investors like pharmaceutical and chemical industries should play a more important role in financing supplier companies. Corporate investors are also expected to be significantly present in the equity financing of health care biotechnology companies. Empirical results from descriptive and multivariate analyses confirm all hypotheses but one: surprisingly, corporate investors invested only marginally in the equity funding of biotechnology firms developing new health care products or services.

Keywords: Start-ups; Biotechnology; Venture Capital; Discrete Choice (search for similar items in EconPapers)
JEL-codes: G32 L21 L6 (search for similar items in EconPapers)
Date: 2004
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https://www.econstor.eu/bitstream/10419/24009/1/dp0409.pdf (application/pdf)

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