Title: Public institutions and venture capital in Europe: a cross-country panel data analysis

Authors: Mondher Cherif, Kaouthar Gazdar

Addresses: Universite de Reims Et Euromed Management, 27 Avenue Gonzalve 94420, Le Plessis-Trevise, France. ' Universite de Reims Champagne-Ardenne, Villa Douce – 9 Bd de la Paix – 51 100 Reims, France

Abstract: The aim of this paper is to explore the importance of public institutions as determinants of venture capital investments, extending the equilibrium model from Jeng and Wells (2000). Starting from the existing literature in this area, we extend it so as to identify the role of public institutions in determining venture capital investments. Our empirical model includes a wide variety of institutional variables collected from different sources and many of the determinants already tested in previous studies. Using a cross-section and a panel data analysis, we find that early stage investments and funds raised are differently affected by the public institutions. Thus, while the public institutions appear relevant for early stage investment, the funds raised are not affected by the institutional indicators. These results are robust to different estimations methods and institutional variables.

Keywords: public institutions; venture capital; Europe; public sector; performance management; investment; cross-section analysis; panel data analysis; equilibrium models.

DOI: 10.1504/IJPSPM.2009.029120

International Journal of Public Sector Performance Management, 2009 Vol.1 No.3, pp.275 - 294

Published online: 04 Nov 2009 *

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