Understanding the role of technological innovation in Venture Capital investments

Details

Supervisors

Gnabo, Jean-Yves

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [120] en sciences économiques, orientation générale

Abstract

The present work investigates the realm of Venture Capital, whose global market after the2008 financial crisis presents significant complexities in understanding how investment patternsof its investors are articulated. Specifically, this study delves into an analysis of the differenttypes of government spending, or investment, thereby identifying a possible rationale behind thedecision-making progress of Venture Capital Investors, in the 2009-2019 time frame.Through the means of a theoretical framework, that contextualizes this work’s research projectinto the governments’ institutional perspective, the study represents an attempt to determinewhether government investments in technological innovation can be considered as drivers for Ven-ture Capital investments. To accomplish so, a simple linear regression model is implemented,hence regressing the number of investment transactions (the response variable) over the amountof tech investments, and then performing another regression controlling for wealth and size of theinvestee country. Building on these premises, this study presents a new perspective on investments in Hi-Tech,which can be deemed as facilitators of access to capital for smaller organizations and startups.Note that those entities could not survive the competition, due to their reduced dimensions, andthe perceptions of higher risk that they drive to the eyes of investors. Therefore, it is concludedthat a higher spending in the ICT, Services and Infrastructure industry segment, hence in the de-gree of technological innovation, positively influences the number of Venture Capital investments.