Anita Quas

Dynamic Capabilities During the Global Crisis: Evidence from Italian New Technology Based Firms

The recent financial crisis and the subsequent economic downturn are undoubtedly the most important global events affecting modern economic systems since the Great Depression of 1930s. Up to now ideas from strategic management theories on why and how some firms have handled the global crisis better than others have almost been absent from conversations. The global crisis represents a dramatic change in the environmental circumstances that can make a firm aware of the inadequacy of its current resources and capabilities configuration. The dynamic capabilities (DCs) notion deals fundamentally with firms’ abilities to renew, modify, and adapt their current bundle of resources and competencies to face new external contingencies so as to achieve congruence with changing business environment and may be a valuable conceptual tool for understanding how firms cope with the current global crisis. The present paper heeds the call for framing the inquiring on the current global crisis within the strategic management discourse and advances knowledge on the handling of the global crisis by ventures in high tech sectors (i.e. New Technology Based Firms, NTBFs from hereafter). We synthesize our arguments in a set of hypotheses that are tested on a sample of 115 Italian NTBFs extracted from the RITA database developed by the Politecnico di Milano. Results show that DCs have a positive impact on firms’ growth performances, and that the extent of the DCs is positively related with the founders human capital of the firm, the internationalization, the presence of technological alliances and the resource slack. In so doing, we contribute to the debate on why and how some firms have coped with the crisis better than other firms.

A Beacon in the Night: Government Certification of SMEs Towards Banks

Policymakers around the world have created several schemes to support financially-constrained SMEs. However, whether these mechanisms improve the access to external sources of finance or on the contrary crowd out private players remains a relevant question. In this paper we study the effectiveness of a recent form of government support, called participative loan, in improving recipient SMEs’ access to external financial debt. Relying on the literature about the certification effect, we develop hypotheses on the conditions under which the improvement is stronger. The empirical analysis is based on a sample of 488 Spanish SMEs that received participative loans from a Spanish government agency and a control group of 719 matched twins. We show that the former register significantly higher external financial debt (31.5%). The effect is stronger for smaller firms, or for those operating in high-technology sectors, which suffer more acutely from information asymmetries, and negligible for firms that already received support from another government-supported institution. After ruling out alternative explanations, we interpret this result as a positive evidence of government certification of SMEs towards banks.

When Can Government Venture Capital Funds Bridge the Equity Gap

Several papers find that government venture capital funds do not add (much) value to their investees, underperform their private peers, or crowd out private investment. However, a major objective of public initiatives in the market for start-up financing is to “bridge the equity gap”. This paper addresses the conditions under which government venture capital funds may fulfill this mission in a best possible way. Our data reveals that the competitiveness of a region where a government venture capital fund is located strongly affects its success. Furthermore, potential collusion and regulatory capture detriment the success likelihood of GVC backed start-ups. Nevertheless, the preferable and most simple method to accomplish the mission is if GVC funds gain particular investee-industry experience and learn from their private peers in syndicated transactions.

The Role of Governmental Venture Capital in the Venture Capital Ecosystem: An Organizational Ecology Perspective:

We use the theory of organizational ecology to study how governmental venture capital (GVC) affects the investment behavior of private venture capital (PVC). Because of its objectives and dominant competencies, GVC is a unique organizational species that occupies a different niche than PVC. GVC is conceived to establish mutualistic relations with PVC. Accordingly, the greater the presence of GVC in a venture capital (VC) ecosystem, the more PVC investors should be attracted toward GVC’s niche. We consider several relevant niche dimensions at the company (age and size), industry (biotechnology), and regional (competitiveness) levels. Our analysis of 1,239 PVC investments in Europe confirms most of our predictions.

How high-tech entrepreneurial ventures cope with the global crisis: changes in product innovation and internationalization strategies

Abstract The global crisis that began in the second half of 2008 abruptly changed the business context, inducing firms to react by modifying their strategies. This paper examines changes in innovation and internationalization strategies that high-tech entrepreneurial ventures implemented to react to the crisis. Relying on insights from the behavioural theory of the firm and threat-rigidity theory, we explore the antecedents of firms’ investments in development of new products and in expansion in international markets and the consequences of these changes on firms’ growth performance. Econometric results from a sample of 140 Italian high-tech entrepreneurial ventures support the view that the stock of resources accumulated by larger firms, firms’ innovation and internationalization investments in the pre-crisis period and firms’ cash flow determine the extent of the two changes. The effects of these changes on firms’ short-term growth performance are positive only for investments in development of new products.

The Impact of Venture Capital Monitoring in Europe

In this paper we aim to empirically test the monitoring effect of Venture Capital financing on portfolio companies. Following Bernstein et al. (2015), we exploit the introduction of a new airline route between investor and investee locations as an exogenous shock lowering the cost of monitoring activities performed by a venture capitalist. Using a sample of 9,564 investments by lead VC investors in Europe, we test how this treatment affects portfolio companies’ performances in terms of the likelihood of being listed or acquired, the number of patents, the number of employees and the amount of sales. Our results show that VC monitoring has a positive and economically relevant effect on European portfolio companies along most of these performance measures, but with different time horizons.

Cambiamenti strategici in risposta alla crisi e crescita delle giovani imprese ad alta tecnologia

As the world economy battles a global crisis of historical breadth and depth, NTBFs (new technology-based firms) are navigating in rough seas. In fact, the radical changes in the competitive arena triggered by the crisis are prompting NTBFs to change their strategies in order to reorient resources and capabilities. The paper adopts the dynamic capabilities perspective to shed light on two research questions: (i) What is the impact on the growth of an NTBF of its dynamic capability to reorient the firm’s strategies to deal with the crisis? and (ii) What are the precursors of this dynamic capability? The paper develops and tests a set of hypotheses using a unique dataset of Italian NTBFs. The econometric results of our analysis show that such dynamic capabilities have a positive effect on NTBF growth and, moreover, that these are positively correlated with the industry-specific technical work experience of the founders of the NTBFs, the NTBFs’ presence as insiders in the international markets, their forging of technological alliances, and their limited resources.