The Impact of Venture Capital on Firm Growth: An Empirical Investigation

Engel, Dirk

doi:10.2139/ssrn.319322

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The Impact of Venture Capital on Firm Growth: An Empirical Investigation

ZEW Discussion Paper No. 02-02

34 Pages Posted: 8 Aug 2002

See all articles by Dirk Engel

Dirk Engel

University of Applied Sciences Stralsund; Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Date Written: January 15, 2002

Abstract

The financial and non-financial involvement of venture capitalists is supposed to be positively correlated with firm performance. This paper deals with the evaluation of the impact of venture capitalists on employment growth of new founded firms. Differences between high-tech and low-tech industries as well as the impact of other investors are analyzed. The estimation results show that surviving venture-backed firms realize higher growth rates compared to surviving non-venture-backed firms. Moreover, venture capitalists are more able to push the firms to a faster and higher employment growth than other investors.

Keywords: Venture Capital, Start-ups, Employment Growth, Selection Bias, Evaluation

JEL Classification: C35, D92, L21

Suggested Citation: Suggested Citation

Engel, Dirk, The Impact of Venture Capital on Firm Growth: An Empirical Investigation (January 15, 2002). ZEW Discussion Paper No. 02-02, Available at SSRN: https://ssrn.com/abstract=319322 or http://dx.doi.org/10.2139/ssrn.319322