TY  - UNPD
A1  - Inderst, Roman
A1  - Müller, Holger
T1  - Early-stage financing and firm growth in new industries
T2  - Working paper series / Institute for Monetary and Financial Stability ; 30
N2  - This paper shows that active investors, such as venture capitalists, can affect the speed at which new ventures grow. In the absence of product market competition, new ventures financed by active investors grow faster initially, though in the long run those financed by passive investors are able to catch up. By contrast, in a competitive product market, new ventures financed by active investors may prey on rivals that are financed by passive investors by “strategically overinvesting” early on, resulting in long-run differences in investment, profits, and firm growth. The value of active investors is greater in highly competitive industries as well as in industries with learning curves, economies of scope, and network effects, as is typical for many “new economy” industries. For such industries, our model predicts that start-ups with access to venture capital may dominate their industry peers in the long run. JEL Classifications: G24; G32 Keywords: Venture capital; dynamic investment; product market competition
T3  - Working paper series / Institute for Monetary and Financial Stability - 30 
KW  - venture capital
KW  - dynamic investment
KW  - product market competition
KW  - Unternehmensgründung
KW  - Innovation
KW  - Risikokapital
KW  - Finanzierung
Y1  - 2009
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/7317
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-72905
UR  - http://www.imfs-frankfurt.de/fileadmin/user_upload/pdf/WP_2009_30_Inderst.pdf
N1  - Published in: Journal of Financial Economics, 2009, vol. 93, issue 2, pp. 276-291
ER  -