Title: The interest of private equity and venture capital for the financing of entrepreneurship in emerging markets

Authors: Sandra Montchaud

Addresses: CHERPA – Sciences Po Aix, 25 Rue Gaston de Saporta – 13625, Aix-en-Provence Cedex 1, France

Abstract: For several decades, the private equity (PE) and venture capital (VC) have been spreading on the international scale and have recently affected emerging countries. The objective of this research is to shed light on the interest of this financing mode for supporting entrepreneurship in these economies, particularly in Africa above all in reference to Morocco and South Africa. For this, we build an analytical framework related to this activity's structuring factors and intervention types. It appears that the development trajectory of PE and VC is based mainly on institutional and international factors which are complementary and self-reinforcing. On such a basis, this financing mode produces, at the micro level, both quantitative and qualitative impacts on the firms in formation, growth or transformation and also generates effects at the macro level. This dynamic could be improved, notably with regard to its ability to support small and medium-sized enterprises (SMEs).

Keywords: emerging markets; entrepreneurship; private equity; venture capital; structural factors; institutional trajectories; international trajectories; intervention types; quantitative impacts; qualitative impacts; micro impacts; macro impacts; emerging economies; entrepreneurial finance; entrepreneurial funding; Morocco; South Africa; financing modes; small and medium-sized enterprises; SMEs; SME funding; SME finance.

DOI: 10.1504/IJEBR.2014.060033

International Journal of Economics and Business Research, 2014 Vol.7 No.2, pp.220 - 240

Published online: 07 Jun 2014 *

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