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Venture Capital in Bank- and Market-based Economies

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  • Adeline Saillard

    (WIFO)

  • Thomas Url

    (WIFO)

Abstract

The determinants of venture capital investment have attracted a significant amount of attention from both academics and policymakers. We use a version of the Keuschnigg-Nielsen model for venture-capital financed projects to condition our analysis on a reasonable set of exogenous variables but we focus on one determinant: financial market structure. The type of financial market structure (bank- or market-based) contributes substantially to explaining differences among countries with respect to the extent of venture capital investments in the initial business stages. We will use the cross country and time series variation from a panel of 19 industrialised countries to support the hypothesis that venture capital thrives within market-based financial systems and is confined to an ancillary role in bank-based systems.

Suggested Citation

  • Adeline Saillard & Thomas Url, 2011. "Venture Capital in Bank- and Market-based Economies," WIFO Working Papers 389, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2011:i:389
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    2. Anders Lund Hansen & Henrik Gutzon Larsen & Adam Grydehoj & Eric Clark, 2015. "Financialisation of the built environment in Stockholm and Copenhagen," Working papers wpaper115, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    3. Taylor, Benjamin & Xiao, Ning & Sikorski, Janusz & Yong, Minloon & Harris, Tom & Helme, Tim & Smallbone, Andrew & Bhave, Amit & Kraft, Markus, 2013. "Techno-economic assessment of carbon-negative algal biodiesel for transport solutions," Applied Energy, Elsevier, vol. 106(C), pages 262-274.
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    5. Heinz Hollenstein, 2013. "Wirtschaftliche Rahmenbedingungen als Element der Innovationspolitik," KOF Analysen, KOF Swiss Economic Institute, ETH Zurich, vol. 7(2), pages 47-55, June.
    6. Wifo, 2020. "WIFO-Monatsberichte, Heft 4/2020," WIFO Monatsberichte (monthly reports), WIFO, vol. 93(4), April.

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    Keywords

    Venture capital; financial market structure; local stock markets; panel data;
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