An econometric study of the determinants of high tech private equity investment in Europe. (2016)

• Record Type: Journal Article
• Authors: Guilhon, Bernard; Montchaud, Sandra
• Is Part Of: International journal of entrepreneurship and small business. Volume 29:Number 3(2016)
• Page Start: 441
• Page End: 467
• Publication Date: 2016
• Subjects: private equity investment -- high tech private equity -- high technology -- macroeconomic situation -- institutional environment -- exit conditions -- innovation dynamics -- Europe -- econometrics -- interest rates -- tax framework -- legal framework -- law -- public offerings -- trade sales -- research and development -- R&amp -- #38 -- D expenditure -- R&amp -- #38 -- D staff -- patents -- patent applications; Entrepreneurship -- Periodicals; Small business -- Management -- Periodicals; 658.42105
• Languages: English
• ISSNs: 1476-1297

Abstract

Our paper aims at identifying the main determinants of high tech private equity (HTPE) investment in Europe. From an analysis of the basic conditions in the PE industry, we have performed an econometric study based on a sample of 17 European countries. The explanatory variables reflect the macroeconomic, institutional, exit, and innovation environments. The results underline the positive impact of the interest rate which shows the prevalence of a demand effect. A favourable tax and legal framework also has a positive influence as has the exit context which degree of impact varies according to the exit channel in favour of public offering (PO) compared to trade sale (TS). Business enterprise research and development (BERD) expenditure, total RD staff, researchers and patents applications have a positive impact on HTPE investment, which is stronger when variables are focused on the HT area.