Lazarevski, Dimche and Mrsik, Jadranka and Smokvarski, Edi (2012): Evolution of the venture capital financing for growing small and medium enterprises in Central and Eastern Europe countries: the case of Macedonia. Published in: Entrepreneurship & Finance eJournal , Vol. 7, No. 47 (7. September 2012)
Download (490kB) | Preview
The objective of this paper is to examine and analyze the differences between Venture Capital development in Macedonia and several Central and Eastern Europe countries, to determine the reasons, and hence extract certain conclusions that will serve as a guideline in Macedonia’s venture capital industry development. Venture capital is an important intermediary in financial markets, providing capital to firms who otherwise have difficulties attracting financial support. Moreover, venture capital funds provide managerial expertise to the company they are investing in, and have impact on the overall economy through innovation, job creation, economic growth, increased competition and improved corporate governance. Private equity and Venture capital funds are present for over 20 years in Central and Eastern Europe. The institutional investors evaluate the individual countries’ attractiveness to identify the best investment opportunities for their asset allocation. On the basis of the performed analysis in this paper regarding the PE/VC fundraising and investment activities, conducted interviews, and Country Attractiveness Index (including the economic activities, depth of capital market, taxation, investor protection and corporate governance, human and social environment and entrepreneurial culture and opportunities), Macedonian small and medium size enterprises are obviously not on the PE/VC investors` map, according to the small amount of their investments up to now.
|Item Type:||MPRA Paper|
|Original Title:||Evolution of the venture capital financing for growing small and medium enterprises in Central and Eastern Europe countries: the case of Macedonia|
|Keywords:||financial markets, financial institutions, venture capital, small and medium enterprises, entrepreneurship|
|Subjects:||D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D53 - Financial Markets
N - Economic History > N2 - Financial Markets and Institutions > N20 - General, International, or Comparative
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O16 - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L26 - Entrepreneurship
G - Financial Economics > G2 - Financial Institutions and Services > G24 - Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
|Depositing User:||Dimche Lazarevski|
|Date Deposited:||16. Oct 2012 20:58|
|Last Modified:||13. Feb 2013 11:53|
Baugh, C.C., & Neupert, K.E. (2003) Culture and national conditions facilitating entrepreneurial start ups. Journal of International Entrepreneurship, 1: 313-330.
Belke, A., Fehn, R., & Foster, N. (2003) Does venture capital investment spur employment growth? CESIFO working paper 930.
Berkowitz, D., & DeJong, D.N. (2004) Entrepreneurship and post-socialist growth. Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, 67 (1): 25046.
Bruce, D. (2000) Effects of the United States tax system on transition into self employment. Labor Economics, 7: 545-574.
Black, B., & Gilson, R. (1998) Venture capital and the structure of capital markets: bank versus stock markets. Journal of Financial Economics, 47 (3): 243-277.
Black, B., & Gilson, R. J. (1998) Venture capital and the structure of capital market: Banks versus stock market. Journal of Financial Economics, 27: 447-471.
Cullen, J.B., & Gordon, R.H. (2002) Taxes and entrepreneurship activity: Theory and evidence for the U.S. NBER working paper 9015.
Cumming, D. Flemming, G., & Schwienbacher, A. (2006) Legality and venture capital exits. Journal of Corporate Finance, 12: 214-245.
Djankov, S., LaPorta, R., Lopez de Silanes, F., & Shleifer, A. (2002) The Regulation of entry. Quarterly Journal of Economics, 117 (1): 1-37.
Djankov, S., Gaiser, T., McLiesh C., Ramalho, R., & Shleifer, A. (2008) The effects of corporate taxes on investments and entrepreneurship. NBER working paper 13756.
Desai, M., Gompers, P. and Lerner, J. (2006) Institutions and entrepreneurial firm dynamics: Evidence from Europe. Harvard NOM Research Paper 03-59.
Engel, D. (2002) The impact of venture capital on firm growth: An empirical investigation. Centre for European Economic Research. Discussion paper 02-02.
European Commission (2009) SBA Fact Sheet Former Yugoslav Republic of Macedonia, Brussels, European Commission. Retrieved from http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/performance-review/pdf/final/sba_fact_sheet_fyrom_en.pdf, on 26/04/12.
EVCA (2007) Central and Eastern Europe Statistics – 2006. Brussels, EVCA. Retrieved from http://www.psik.org.pl/new/docs/doc_evca_ceestats.pdf, on 22/04/12.
EVCA (2009) Central and Eastern Europe Statistics – 2008. Brussels, EVCA. Retrieved from http://www.cvca.cz/files/CEE_Stats_2008.pdf, on 22/04/12.
EVCA (2011) Central and Eastern Europe Statistics – 2010. Brussels, EVCA. Retrieved from http://www.evca.eu/uploadedfiles/PBCEE10.pdf, on 23/04/12.
Fehn, R., & Fuchs, T. (2003) Capital market institutions and venture capital: Do they affect unemployment and labour demand? CESIFO working paper 898.
Gompers, P., Lerner, J. (1998) What drives venture capital fundraising. Brookings Proceedings on Economics Activity – Microeconomics, pp. 149-192. National Bureau of Research Working Paper 6906 (January 1999)
Gompers, P., & Lerner, J. (2000) Money chasing deals? The impact of funds inflows on the valuation of private equity investments. Journal of Economics, 55: 281-325.
Green, P.G. (1998) Dimension of perceived entrepreneurial obstacles, in: P. Reynolds (ed.), Frontiers of entrepreneurship research, Babson Park, Center for Entrepreneurial Studies, Babson College: 48-49.
Groh, A., Liechtenstein, H. and Lieser, K. (2011) Global Venture Capital and Private Equity Attractiveness Index. IESE Business School Barcelona.
Hellman, T., & Puri, M. (2000) The interaction between products market and financing strategy: The role of venture capital. Review of financial studies. 13 (4): 959-984.
Kortum, S., & Lerner, J. (2000) Assessing the contribution of venture capital to innovation. Rand Journal of Economy, 31 (4): 674-692.
Lee, S.M., & Peterson, S.J. (2000) Culture, entrepreneurial orientation and global competitiveness. Journal of World Business, 35: 401-416.
Roe, M. (2006) Political determinants of corporate governance. Oxford.
Roman, A., & van Pottelsberghe de la Potterie, B. (2004) The determinants of venture capital: A panel analysis of 16 OECD countries. Universite Libre de Bruxelles. Working paper WF. CEB 04/015.
World Bank (2010) Beeps At-A- Glance 2008 FYR Macedonia, Washington, WB. Retrieved from http://siteresources.worldbank.org/23647F7B-F9BD-46C8-A3B3-F2BACA8692EC/FinalDownload/DownloadId-48FF4482190F6E0AA68981B1BD0FA84D/23647F7B-F9BD-46C8-A3B3-F2BACA8692EC/INTECAREGTOPANTCOR/Resources/704589-1267561320871/FYR_Macedonia_2010.pdf, on 25/04/12.
World Bank (2011) Doing Business Survey, Washington, WB. Retrieved from http://www.doingbusiness.org/23647F7B-F9BD-46C8-A3B3-F2BACA8692EC/FinalDownload/DownloadId-B4888E32B5C01A74085F8741A6DA3788/23647F7B-F9BD-46C8-A3B3-F2BACA8692EC/~/media/fpdkm/doing%20business/documents/annual-reports/english/db11-fullreport.pdf, on 25/04/12.