Affiliation:
1. Tuck School of Business, Dartmouth College, USA and NBER
2. Smeal College of Business, Pennsylvania State University , USA
Abstract
Abstract
We examine the relation between venture capital (VC) investments, M&A activity, and merger competition laws in 45 countries around the world. We find evidence of a strong positive association between VC investments and lagged M&A activity, consistent with an active M&A market providing viable exit opportunities for VC companies and therefore incentives for venture capitalists to invest. We also explore the effects of country-level merger competition laws and pro-takeover legislation passed internationally on VC activity. We find significant reductions in VC activity in countries with stricter competition laws and find that VC activity intensifies after the enactment of country-level takeover-friendly legislation. (JEL G15, G24, D43, K21, L26)
Publisher
Oxford University Press (OUP)
Subject
Economics and Econometrics,Finance,Business and International Management
Cited by
1 articles.
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1. The Interplay Between M&A, Innovation, and VC Markets;The Palgrave Encyclopedia of Private Equity;2023-12-21