The impact of venture capital on the productivity growth of European entrepreneurial firms: ‘Screening’ or ‘value added’ effect?

Samuele Murtinu, Annalisa Croce, José Martí

Research output: Contribution to journalArticlepeer-review

141 Citations (Scopus)

Abstract

We aim to ascertain to what extent the better performance of European venture capital (VC)- backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms’ productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors 'imprint' the portfolio firm.
Original languageEnglish
Pages (from-to)489-510
Number of pages22
JournalJournal of Business Venturing
Volume28
DOIs
Publication statusPublished - 2013

Keywords

  • Entrepreneurial firms
  • Imprinting effect
  • Screening
  • Value added
  • Venture capital

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