Is venture capital performance affected by recessions? Evidence from the UK Venture Capital Trust scheme

Siepel, Josh (2016) Is venture capital performance affected by recessions? Evidence from the UK Venture Capital Trust scheme. International Review of Entrepreneurship, 14 (1). ISSN 2009-2822

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Abstract

This paper seeks to explore whether firms that have received VC investment are subject to the same recessionary pressures as other small firms, or if receipt of VC incurs resilience to macroeconomic turbulence. It examines the survival and exit patterns of UK venture capital investments during the recessionary periodsGreat Recession of 2008-9, and compares these patterns to the dot-com boom and bust of 1999-2001. Using a new dataset of over 5000 investments made by UK Venture Capital Trusts (VCT) from 1995-2009, the paper uses using Cox survival models to examine the impact of macroeconomic turbulence on duration of investment. The paper finds that in contrast to high exit rates during the dot-com period, firms receiving VCT investment were significantly been less likely to exit by failure or other means during the recession of 2008-9.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > SPRU - Science Policy Research Unit
Subjects: H Social Sciences > HG Finance > HG4501 Investment, capital formation, speculation > HG4701 Government securities. Industrial securities. Venture capital
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Depositing User: Josh Siepel
Date Deposited: 11 Apr 2016 11:51
Last Modified: 06 Mar 2017 21:57
URI: http://sro.sussex.ac.uk/id/eprint/22757

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