Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/153512
Authors: 
Popov, Alexander
Roosenboom, Peter
Year of Publication: 
2009
Series/Report no.: 
ECB Working Paper 1078
Abstract: 
Using a comprehensive database of European firms, we study how private equity affects the rate of firm entry. We find that private equity investment benefits new business incorporation, especially in industries with naturally higher entry rates and R&D intensity. A two standard deviation increase in private equity investment explains as much as 5.5% of the variation in entry between high-entry and low-entry industries. We address endogeneity by exploiting data on laws that regulate private equity investments by pension funds. Our results hold when we correct for barriers to entry, general access to credit, protection of intellectual property, and labor regulations.
Subjects: 
firm entry
private equity
Venture Capital
JEL: 
G24
L26
M13
Document Type: 
Working Paper

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