The impact of patenting on the size of high-tech firms: the role of venture capital and product market regulation
- 165 Downloads
We investigate how public policies related to product market regulation (PMR) influence the ability of European young venture-capital (VC) backed firms compared to a sample of matched non-VC backed firms to grow in size in proportion to their innovative activity. Whereas VCs can presumably offer value-added services to overcome the regulatory constraints of PMR, we find that VC-backed firms relative to non-VC backed ones are more adversely sensitive to these policies. This evidence indicates that PMR impedes the most VC-backed firms’ high-potential for innovation-driven growth.
KeywordsVenture capital Product market regulation Innovation High-tech ventures Public policy
JEL ClassificationG28 Government Policy and Regulation G24 Investment Banking • Venture Capital • Brokerage • Ratings and Ratings Agencies
- Alvarez-Garrido, E., & Dushnitsky, G. (2015). Are entrepreneurial venture’s innovation rates sensitive to investor complementary assets? Comparing biotech ventures backed by corporate and independent VCs. Strategic Management Journal,. doi: 10.1002/smj.2359.
- Andrews, D., Criscuolo, C., & Menon, C. (2014). Do resources flow to patenting firms? OECD Economics Department Working Papers. pp. 1127. http://dx.doi.org/10.1787/5jz2lpmk0gs6-en.
- Arnold, J. M., Nicoletti, G., & Scarpetta, S. (2011). Does anti-competitive regulation matter for productivity? Evidence from European firms. SSRN. http://ssrn.com/abstract=1765677.
- Bertoni, F., & Martí, J. (2011). Financing entrepreneurial ventures in Europe: The VICO dataset. SRN, 1904297. http://ssrn.com/abstract=1904297.
- Chemmanur, T. J., Krishnan, K., & Nandy, D. K. (2011). How does venture capital financing improve efficiency in private firms? A look beneath the surface. Review of Financial Studies 24(12), 4037-4090.Google Scholar
- Colombo, M.G., De Massis, A., Piva, E., Rossi-Lamastra, C., & Wright, M. (2014). Sales and employment changes in entrepreneurial ventures with family ownership: empirical evidence from high-tech industries. Journal of Small Business Management, 52(2), 226–245.Google Scholar
- Colombo, M. G., & Murtinu, S. (2016). Venture capital investments in Europe and portfolio firms' economic performance: independent versus corporate investors. Journal of Economics & Management Strategy, forthcoming. Available at SSRN 2565022.Google Scholar
- Criscuolo, C., Gal, P. N., & Menon, C. (2014). The dynamics of employment growth. OECD Science, Technology and Industry Policy Papers, 14. doi: 10.1787/5jz417hj6hg6-en.
- Cumming, D. J., Grilli, L., & Murtinu, S. (2014). Governmental and independent venture capital investments in Europe: A firm-level performance analysis. Journal of Corporate Finance (Forthcoming). doi: 10.1016/j.jcorpfin.2014.10.016
- Dushnitsky, G. (2012). Corporate venture capital in the 21st century: an integral part of firms’ innovation toolkit. Oxford handbook of venture capital, pp. 156–210.Google Scholar
- Ernst, H., Witt, P., & Brachtendorf, G. (2005). Corporate venture capital as a strategy for external innovation: An exploratory empirical study. r&d Management, 35(3), 233–242.Google Scholar
- Hall, B. H., Jaffe, A., & Trajtenberg, M. (2005). Market value and patent citations. RAND Journal of Economics, 36(1), 16–38.Google Scholar
- Lanjouw, J. O., & Schankerman, M. (1997). Stylized facts of patent litigation: Value, scope and ownership. NBER. http://www.nber.org/papers/w6297.
- Schaffer, M. E. (2012). Xtivreg2: Stata module to perform extended IV/2SLS, GMM and AC/HAC, LIML and k-class regression for panel data models. Statistical Software Components. Google Scholar