Firms’ responses to private- and government sponsored venture capital

PublicationReports

Daniel Halvarsson, Entreprenörskap, Erik Engberg, Företagandets villkor, Företagsstöd, Patrik Gustavsson Tingvall, Riskkapital, Tillväxt, Tillväxtanalys

Abstract

There is major political interest in promoting enterprise, entrepreneurship and economic growth, and the same goes for the significance of capital provision in this context However, interest on the part of society in facilitating small and medium-sized companies’ financing situation is far from new.

This report analyses actual outcomes of government and private venture capital investments (venture capital, VC) and real effects on employment, turnover and investments in real capital in portfolio companies. It also examines whether the effects differ between government and private VC, and which companies and phases the public actors invest in compared with the private actors.

The results do not demonstrate any dramatic differences between public and private VC investors in terms of growth effects, even though there are some tendencies towards a stronger growth effect via private venture capital. Further, the public VC companies do not differ from private investors when it comes to their propensity to invest in the earliest phases. A somewhat surprising result as it is the lack of venture capital in the earliest phases which is often used as an argument to justify the government’s role as an actor in the VC market. The public VC companies also seem to be more disposed to stay the course with, and continue to invest in, stagnant companies which do not take off and grow.

Gustavsson Tingvall, P., Halvarsson, D., & Engberg, E. (2017). Firms’ responses to private- and government sponsored Venture Capital. (PM nr. 2017:02). Östersund: Tillväxtanalys.

Amundsen versus Scott: are growth paths related to firm performance?

Article (with peer review)Publication

Coad, A., Daunfeldt, SO. & Halvarsson, D.

Publication year

2022

Published in

Small Business Economics 59, 593–610 (2022).

Abstract

In the race to the South Pole, Roald Amundsen’s expedition covered an equal distance each day, irrespective of weather conditions, while Scott’s pace was erratic. Amundsen won the race and returned without loss of life, while Scott and his men died. In the context of firm growth, the Amundsen hypothesis suggests that smoother growth paths are associated with better performance in subsequent periods. We develop a new method to investigate how firms’ sales growth deviates from their long-run average growth path. Our baseline results suggest that growth path volatility is associated with higher growth of sales and profits, but also with higher exit rates. However, this result is driven by firms with negative growth rates. For positive-growth firms, volatility is negatively associated with both sales growth and survival, providing nuanced support for the Amundsen hypothesis.

The article can be accessed here.

Ratio Working Paper No. 358: Native Population Turnover & Emerging Segregation: The Role of Amenities, Crime and Housing

Working paperPublication

Korpi, M., Halvarsson, D., Öner, Ö., A.V. Clark, W., Mihaescu, O., Östh, J. & Bäckman, O.

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Publication year

2022

Published in

Ratio Working Paper.

Abstract

Using geo-coded full-population grid-level data for the three largest metropolitan areas in Sweden, 1993-2016, this paper i) estimates the level and pace of ethnic segregation, ii) examines possible tipping points in this development, and iii) gauges the importance of several mitigating or exacerbating factors (such as the mix of housing area tenure type, different types of amenities, and crime). We use OLS and 2SLS to estimate outcomes at two different geographic levels; 250 x 250 square meter grids and SAMS areas (roughly equivalent to US census tracts), respectively. On average, we find that for every 1 percentage point increase in immigration, native growth is reduced by around -0.3 percentage points. Crime levels exacerbate developments and factors such as housing area tenure-type mix and access to various amenities slows it down, but only marginally so. Using repeated and single random sampling for cross-validation, and the twin common methodological approaches as suggested in the literature, we estimate possible tipping points in these segregation developments. In contrast to most other studies in the literature, none of our potential tipping points are however statistically significant when probing their relevance in explaining factual population developments, suggesting a rather more continuous – albeit steeply so – segregation process rather than a structural brake. In terms of tipping point methodology, our main findings are that fixed-point estimation is less robust than R-square maximization for small geographical units, and that the former consistently selects for lower tipping-point candidates than the latter.

Ratio Working Paper No. 360: Do gender norms travel within corporations? The impact of foreign subsidiaries on the home country gender wage gap

Working paperPublication

Halvarsson, D., Lark, O., Tingvall, P., Vatherd, P. & Videnord, J.

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Publication year

2022

Published in

Ratio Working Paper series.

Abstract

In this note, we provide evidence that gender norms can be transferred within firms and across borders by means of foreign direct investment. Using microdata from both Sweden and Estonia, two countries with vastly different levels of gender inequality, we find that firms in Sweden with strong intra-firm linkages to Estonia display a relatively large gender wage gap at home.

Abstract

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