Efficiency of venture capital firms: evidence from Spain

In recent years the venture capital (VC) sector has played an increasingly important role in financial systems. In general, this type of specialised financial activity is conducted by two types of operators, VC firms and VC management companies, each with its specific characteristics. The main objec...

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Bibliographic Details
Published in:Small business economics 2014-06, Vol.43 (1), p.229-243
Main Authors: Haro-de-Rosario, Arturo, del Carmen Caba-Pérez, Ma, Cazorla-Papis, Leonardo
Format: Article
Language:English
Subjects:
Analysis
Business and Management
Business management
Business structures
Capital management
Data envelopment analysis
Economic efficiency
Efficiency metrics
Entrepreneurship
Financial investments
Financial systems
Industrial Organization
Institutional investments
Investment management companies
Investment strategies
Investors
Management
Microeconomics
Portfolio management
Production capacity
Regression analysis
Small and medium sized enterprises
Small business
Spain
Studies
Venture capital
Venture capital companies
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Summary:In recent years the venture capital (VC) sector has played an increasingly important role in financial systems. In general, this type of specialised financial activity is conducted by two types of operators, VC firms and VC management companies, each with its specific characteristics. The main objective of this paper is to evaluate the operating efficiency of these financial intermediaries in Spain, using data envelopment analysis, and to carry out an exploratory study of the variables that affect their level of efficiency, using a truncated regression model, and taking into consideration the nature of the operator (an approach not previously undertaken). Our analysis reveals, first, differences in the levels of efficiency achieved by VC firms and VC management companies and, second, that the most efficient organisations are those with more diversified ownership structures and which have a portfolio of companies active in the most innovative sectors.
ISSN:0921-898X
1573-0913
DOI:10.1007/s11187-014-9541-0