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Key Facts

  • Project Start: Feb 15 2008
  • Project End: Feb 14 2010
  • Coordinator: German Institute for Economic Research (DIW Berlin)
  • EU Contribution:
    998 170 EUR

    • // FINESS Flyer

    Upcoming Events

  • May 10-11 2010, Brussels: International Policy Conference

    • // Programme

    Recent Events

  • April 26 2010, Berlin: Advisory and Steering Committee Meeting

  • January 2010: 4th Steering Group Meeting

  • Sept 14 2009, Berlin: 3rd Steering Group Meeting

  • March 5-6 2009, Berlin: International Scientific Conference

  • March 6 2009, Berlin: 2nd Steering Group and Advisory Committee Meeting

  • Sept 8 2008, Berlin: 1st Steering Group Meeting

  • Feb 22 2008, Berlin: Kick-off Meeting

    • Consortium

    Project Structure

    WP3: PRIVATE EQUITY, VENTURE CAPITAL AND THE PERFORMANCE OF FIRMS

    Objectives

  • Theoretical and empirical analysis of the determinants of external equity financing for young non-listed companies. Analysis of the role of venture capital financing in Europe and of its impact on firm performance compared to the USA.
  • Theoretical and empirical analysis of the determinants of private equity financing across Europe. Understanding the role of private equity financing for firm performance and survival in Europe compared to the USA.
  • Assessment of the development prospective of the private equity sector in Europe, taking into consideration the competition within and between the banking and the private equity sector.
  • Assessment of the role of the private equity and venture capital industry for the successful transition of New Member States. Lessons from the experience of other EU countries in the course of establishing a lively venture capital and private equity industry.
  • Identifying the role of the government to promote equity financing.

    • Work description

  • Extracting information from different databases
     Representative panel of German medium-sized firms run by the German Bank for Reconstruction and Development (KfW): Information on firm indicators, private equity investment and the usage of public promotional programs. A self-collected survey among German venture capital providers is also used. On the European level data from the European Private Equity and Venture Capital Association are employed (Bureau Van Dijk). This database is the input for the other tasks.
  • Analysis of drivers of venture capital and of the impact of venture capital on the performance of firms
    Drivers of venture capital and impact of venture capital on the performance of firms are explored using paneleconometric methods.
  • Analysis of drivers of private equity investment in mature firms
     Drivers of private equity investment are analysed by paneleconometric methods. The USA and UK are the leading countries with regard to private equity and venture capital investment. These countries are used as a benchmark for the analysis of EU Member States.
  • Analysis of the impact of bank concentration on private equity sector
    The private equity industry competes to some degree with banks for the financing of high growth firms. Thus, it is expected that increasing banking concentration will affect the private equity industry on the demand and supply side. The nature of the impact will be investigated on the firm level. This study refers to a merged dataset, using Amadeus and DIW databases. Appropriate merging variables are identified based on the results of previous research.
  • Venture capital and private equity in Eastern European countries
     The private equity and venture capital industries are compared to those in the Old Member States, in particular Germany and the UK. Specific shortcomings of the industries in the New Member States are identified. The role of public promotion in the catching up process is also explored.
  • Policy implications
     Extraction of policy relevant conclusions with a particular focus on market failures in financing firms with equity. Development of guidelines to remove obstacles for private equity and venture capital investments in the Old and New Member States.

    • Workpackage Leader: Dorothea Schaefer

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