Resource title

Venture capital versus bank financing in innovative German firms

Resource image

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Resource description

The paper investigates young firms' choice of capital source. Our theoretical model hypothesizes a positive (negative) relation between riskiness of the project (price of venture capital) and receiving informed equity. We test our predictions by employing a unique data set collected by KfW group. The theoretical framework is largely confirmed for the sample of bank financing and independent VC financing. However, the picture is less clear if the sample includes also public and bank-dependent VCs. In this case, empirical evidence is less compatible with theory, in particular the evidence on intrinsic project risk is inconclusive.

Resource author

Dorothea Schäfer, Oleksandr Talavera, Volker Zimmermann

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/27226

Resource license

Adapt according to the presented license agreement and reference the original author.