Is green the new gold? Venture capital and green entrepreneurship
We test whether born-to-be-green represents a signal toward potential venture capital (VC) investors on a sample of Italian, independent, unlisted, high-tech entrepreneurial firms. We employ several identification strategies by controlling for the major potential signals and the alleged selection bi...
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Veröffentlicht in: | Small business economics 2019-04, Vol.52 (4), p.929-950 |
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Format: | Artikel |
Sprache: | eng |
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Zusammenfassung: | We test whether born-to-be-green represents a signal toward potential venture capital (VC) investors on a sample of Italian, independent, unlisted, high-tech entrepreneurial firms. We employ several identification strategies by controlling for the major potential signals and the alleged selection bias between green and nongreen entrepreneurs. We exploit firm-level information about the “active search for VC financing.” Alternatively, we exploit the cross-local community variation in the awareness about environmental issues in an instrumental variable setting. Our results show that neither running a business based on green technologies nor positioning a business in a green sector per se are strongly correlated with the likelihood to get VC. Instead, we find that born-to-be-green can be a reliable signal for investors only when entrepreneurs perform activities based on green technologies/products and position their business in a green sector, at the same time. Further, we present three contingencies that moderate the association between green business propositions and the likelihood to get VC, namely the technical/scientific education of the founder (s), the origin of the firm as academic spin-out, and the presence of corporate shareholders into the venture’s equity. The paper offers relevant managerial implications. |
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ISSN: | 0921-898X 1573-0913 |
DOI: | 10.1007/s11187-017-9943-x |