Publication

This paper analyzes the efficiency of venture capital and its impact on primary equity markets in France and Germany. The author shows that venture capital operates according to the signalling model in France and according to the learning model in Germany. While the learning model can serve as a rationale for government subsidies, in the signalling model, young venture capital firms seek to signal their quality to outsiders by taking portfolio firms public early. Furthermore, the author discusses a variety of empirical tests and policy implications.