استراتژی های سرمایه گذاری صندوق های سرمایه گذاری با پشتیبانی دولت
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|9897||2013||10 صفحه PDF||سفارش دهید||10340 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Banking & Finance, Volume 37, Issue 3, March 2013, Pages 707–716
This paper investigates the effects of public ownership on the investment strategy of hybrid VC funds. We exploit a unique dataset containing data for all of the venture capital funds in Europe that received financial support from the European Investment Fund (EIF) during the years 1998–2007. The dataset includes 179 VC funds that invested in 2482 companies. We find that the level of public ownership shows a weak negative correlation with the likelihood of observing a write-off and that a higher public share is associated with a longer duration for the investment. The latter effect is more relevant for those investments that generate intermediate financial returns. The results are robust to the introduction of controls at the target firm level and for financial market conditions.
It is well known that financial constraints are particularly acute for innovative entrepreneurial firms because their investment returns are uncertain, they have little collateral to secure debt, they are subject to higher informational frictions and their capital, which is mostly intangible, is difficult to redeploy and is characterized by relevant bankruptcy costs (Carpenter and Petersen, 2002 and Hall, 2002).1 As entrepreneurial activities increasingly contribute to innovation and economic growth, policy makers have focused on implementing policies that enhance financing offerings for entrepreneurs by influencing their incentives and payoffs. In particular, evidence that more available venture capital (VC) allows for an increase in successful entrepreneurial activity (see, for example, Levine, 1997; Kortum and Lerner, 2000) has led many governments and regional authorities worldwide to implement programs to mobilize venture capital. The available evidence on this type of policy intervention shows that there is a high degree of heterogeneity in the models that are adopted to support the development of VC funds in specific regions/countries and a contingent lack of comprehensive evaluation of the effects that they have encouraged. However, several works in the field of entrepreneurial finance have attempted to assess the economic properties, the efficacy, the social desirability and the risks of using this type of policy as a tool to support entrepreneurship and innovation (Gompers and Lerner, 1998, Cressy, 2002, Lerner, 2002, Leleux and Surlemont, 2003, Armour and Cumming, 2006 and Da Rin et al., 2006). A first stream of research has focused on the impact of public policies on the environmental conditions in which private VC firms operate, including tax regimes for private equity operators, legal requirements for IPOs and LBOs, corporate governance legislation and the level of development of the financial markets (Da Rin et al., 2006, Leleux and Surlemont, 2003 and Gilson, 2003). A second stream of research has addressed a specific type of public policy intervention: the direct co-funding of venture capital funds. Vehicles by which independent VC firms are used to channel and allocate public financial support are often termed “hybrid funds” (Jääskeläinen et al., 2007 and NESTA, 2009). The present study focuses on this second type of public intervention. Direct public support of VC initiatives, in principle tailored to the specific institutional context of the economic region of interest,2 has been aimed at increasing the aggregate pool of capital for entrepreneurs. In particular, the rationales often advocated for these policy interventions are that (i) the private sector provides insufficient capital to new, innovative firms and (ii) the government can drive the investment selection process towards investment opportunities that will ultimately yield high social returns (in addition to the private ones) (Lerner, 2002). The present study investigates the effects of public ownership on the investment strategy of hybrid VC funds; these effects are ultimately reflected both in the ex-ante selection process for the target companies and in their post-acquisition management. The intensity of public ownership can have different implications along these two dimensions. We use a dataset of 179 venture capital funds that received financial support from the European Investment Fund (EIF), the European Union body specializing in SME equity financing.3 The primary advantage of the EIF dataset is the high reliability and the completeness of the information available on each deal. For its investment activity, EIF deploys either its own resources or resources mandated by its shareholders. EIF’s investment in the analyzed funds is regulated by the Risk Capital Mandate (European Investment Bank). Target VC funds must be in compliance with the EIF’s objectives and operational guidelines, as well as with the Risk Capital Mandate Investment Guidelines. Investments in eligible funds are made after a detailed due diligence is carried out on all aspects of the investment proposal. Particular attention is paid to the quality of the funds’ management teams, to their degree of focus on the type of companies targeted by the Mandate facility and to their potential to contribute to the growth of these companies while, at the same time, generating returns consistent with market conditions. The paper adds to the literature in two ways. First, due to the novelty and richness of the database at our disposal, we provide new evidence on the effects of the intensity of public ownership on venture capital investment strategies in Europe at an unparalleled level with respect to the extant studies in the field, which generally have a national focus or analyze limited samples.4 Second, we contribute methodologically to identifying the different factors that affect the observed outcomes of the investment activity of hybrid VC funds. From a methodological perspective, this is far from an easy task when an empirical study is run on funds that are still operating at the time of the analysis. The results indicate that even after controlling for the funds’ and the portfolio firms’ characteristics, as well as for the financial market’s conditions, the level of public ownership affects the selection of investments and their subsequent management. In this paper, we use the incidence of write-offs to look at the ex-ante selection process for the target companies, while we focus on the timing of the exit to examine their post-investment management. We find that (i) the level of public ownership shows a weak negative correlation with the likelihood of observing a write-off, and (ii) a higher public share is associated with a longer duration for the investment. The latter effect is more relevant for those investments that generate intermediate financial returns. We argue that these firms are retained in a fund’s portfolio – even if their return profile might not be completely satisfactory from a private investor’s perspective – because they are expected to generate significant additional social returns. The remainder of this paper is organized as follows. Section 2 discusses the previous research on the rationales and effects of direct public intervention in the VC industry. Section 3 clarifies our research setting and proposes testable hypotheses. Section 4 introduces the datasets and the summary statistics. Section 5 presents the econometric models used and discusses the results. In Section 6, we draw conclusions and explain the implications of our findings.
نتیجه گیری انگلیسی
In this paper, we investigate the impact of public ownership levels on the investment strategies of hybrid VC funds. In particular, the empirical analysis is focused on observing the likelihood of write-offs and the timing of exits. The results suggest that different levels of public ownership are associated with significantly different investment patterns. More specifically, the joint observation of the results from the probit and the duration models suggest that higher public stakes are significantly correlated with a lower incidence of write-offs and a longer duration for the investments, particularly in the case of deals that are characterized by intermediate levels of financial returns. We argue that this evidence is compatible with the objective function of a public investor, which is not simply restricted to financial returns, as private investors would demand, but also includes additional factors related to the spillover effects of entrepreneurship. From this perspective, our evidence also suggests that the hybrid funds seem to compete with private funds in not perfectly overlapping segments of potential target firms. In this sense, the problem of potential crowding out effects of public direct support in the VC industry seems to be mitigated. We have deliberately focused the analysis on the funds’ investment strategy rather than on the financial returns generated at the fund level. VC funds that contain a larger public stake appear to have a more risk averse and “patient” investment strategy. We argue that our approach contributes to the extant literature, which, when addressing the impact of public funding, has adopted a standard financial fund-level perspective that could have induced a more negative evaluation of the role of public support to VC. We are aware that the generalization of our findings is not straightforward because our database includes only funds that received public money from a specific institutional subject. However, this paper also provides a theoretically grounded methodology to allow the replication of the analysis on other samples of publicly sponsored VC funds.