Documents private investment 38 results

"Based on the literature on the diversity of capitalism (DoC) and legal origin (LO), this article examines the role of institutional configurations in the uneven development of private equity (PE) in 18 European countries. The article shows that developed stock markets, the ability of limited partners (insurance companies) to invest in LBO funds and low employment protection are more important determinants than investor protection in the case of LBO investments. However, venture capital (VC) investments are found to be positively associated with investor protection but also with developed stock markets and favourable tax rates for managers. R&D tax incentives for investee companies are found to have a negative impact on VC investments, which are nonetheless promoted by public R&D expenditures. Even if national institutional configurations matter in explaining differences, as emphasised by LO and DoC, we observe a common trend in PE development and financialisation."

"We provide the first cross-country evidence of the effect of investment by private equity firms on innovation, focusing on a sample of European countries and using Kortum and Lerner's (2000) empirical methodology. Using an 18-country panel covering the period 1991-2004, we study how private equity finance affects patent applications and patent grants. We address concerns about causality in several ways, including exploiting variation in laws regulating the investment behaviour of pension funds and insurance companies across countries and over time. We also control for the standard determinants of innovation like R&D, human capital, and patent protection. Our estimates imply that while private equity investment accounts for 8% of aggregate (private equity plus R&D) industrial spending, PE accounts for as much as 12% of industrial innovation. We also present similar evidence from the biotech industry to alleviate concerns that our results are biased by aggregation."

"The climate crisis and the global economic impact of the Covid-19 crisis occur against a background of slowing growth and widening inequalities, which together imply an urgent need for a new environmentally sustainable and inclusive approach to growth. Investments in "clean" innovation and its diffusion are key to shaping this, accompanied by investments in complementary assets including sustainable infrastructure, and human, natural and social capital which will not only help achieve net-zero greenhouse gas emissions, but will also improve productivity, living standards and the prospects of individuals. In this article, we draw on the theoretical and empirical evidence on the opportunities, drivers and policies for innovation-led sustainable growth. We highlight the importance of a coordinated set of long-term policies and institutions that can enable and foster private sector investments in clean innovation and assets quickly and at scale. In doing so, we draw inspiration from Chris Freeman's work on the system-wide drivers of innovation, and his early vision of achieving environmental sustainability by reorienting growth."

"An increasingly large share of cross-border acquisitions are undertaken by private equity-firms (PE-firms) and not by traditional multinational enterprises (MNEs). We propose a model of cross-border acquisitions in which MNEs and PE-firms compete over domestic assets. MNEs' advantage lies in firm-specific synergies and retained earnings, whereas PE-firms are good at reorganizing target firms. Prevailing interest rates do not work in favor of PE-firms, but a lower risk premium and a better financial market development does. Stronger firm-specific synergies, however, favors MNEs. Performing a welfare analysis, we show that a policy of restricting PE-firms from buying domestic assets can be counterproductive."

"Les plateformes de financement participatif sur Internet (crowdfunding) connaissent un véritable engouement. Il en existe principalement trois formes : celles qui proposent aux internautes de faire un don – la plus populaire, notamment dans le secteur culturel (musique, cinéma, etc.) –, d'autres encore qui fonctionnent selon le principe de prêts rémunérés (crowdlending), et enfin les plateformes qui permettent un financement participatif en capital (crowdequity). La France, plutôt bien placée dans le secteur nouveau du crowdfunding, pourrait l'être davantage encore. Le financement participatif reste en effet peu efficace : de nombreuses campagnes de crowdfunding échouent. C'est pourquoi le gouvernement français, qui a décidé de faire de notre pays un leader européen en la matière, a mis en place une régulation propre aux activités de crowdfunding afin de renforcer la confiance du public vis-à-vis de ce type de financement."

"We measure the commonality in hedge fund returns, identify its main driving factor and analyse its implications for financial stability. We find that hedge funds' commonality increased significantly from 2003 until 2006. We attribute this rise mainly to the increase in hedge funds' exposure to emerging market equities, which we identify as a common factor in hedge fund returns over this period. Our results show that funds with a high commonality were affected disproportionately by illiquidity and exhibited negative returns during the subsequent financial crisis, thereby providing little diversification benefits to the financial system and to investors."

"This paper explores the long run relationship between public and private investment in the euro area in terms of capital stocks and gross investment flows. Panel techniques accounting for international spillovers are employed. While private and public capital stocks are cointegrated, the evidence is quite fragile for public and private investment flows. They enter a long run relationship only after fundamental drivers of private investment, such as demand and financing costs are included. According to the impulse response analysis, private investment reacts to shocks in public investment both in terms of stock and flow variables. In contrast, public investment is rather exogenous. Therefore, the lack of public investment might have restricted private investment and GDP growth in the euro area. The results have strong implications for the future direction of fiscal austerity programs to combat the euro area debt crisis."