Publication detail

Private equity and venture capital: what macroeconomic and institutional factors do drive the demand side in Central and Eastern European markets?

GRYČ, M. ZINECKER, M.

Original Title

Private equity and venture capital: what macroeconomic and institutional factors do drive the demand side in Central and Eastern European markets?

Type

conference paper

Language

English

Original Abstract

Research background: Recent academic studies identified many macroeconomic and institutional factors influencing private equity and venture capital market. In Central and Eastern Europe remains, however, the volume of projects covered by private equity and venture capital rather poor compared to their western European counterparts. Barriers on both the demand and supply side are discussed. Purpose of the article: In this paper we intend to understand which macroeco-nomic and institutional factors influence the demand side of the venture capital market in Central and Eastern European countries, specifically in the Czech Re-public, Hungary, Poland, Slovakia, Slovenia, Croatia, Estonia, Lithuania, Latvia, Bulgaria and Romania. Methods: We cover the period between 2006 and 2016. Secondary data from the World Bank Databank and Invest Europe are used. Our main methodological tools are descriptive statistics, Granger causality test and Kendal-Tau correlation. Findings & Value added: The results of descriptive statistics show that institution-al environment improved in the observed countries. The number of days to start a business and the number of start-up procedures lowered. The regulations protect-ing investors also recorded a slight improvement. The Granger causality test offer-ing a first hint at the relationships between PE/VC and the explanatory variables suggests that the following factors might be relevant: economic fitness ranking, domestic credit to private sector, corruption perception index, enforcing contracts and total tax rate. The Kendall Tau Correlation, however, confirms only one statis-tically significant result of the previous Granger causality test: The correlation between PE/VC investments and Economic Fitness Ranking. Thus the vast majori-ty of explanatory variables proved to be statistically insignificant.

Keywords

Macroeconomics; Institutions; Private Equity; Venture Capital; Demand; Central and Eastern Europe

Authors

GRYČ, M.; ZINECKER, M.

Released

10. 12. 2019

Publisher

Institute of Economic Research

Location

Torun/Poland

ISBN

978-83-65605-12-2

Book

Proceedings of the International Conference on Applied Economics: Finance

Edition

Contemporary Issues in Economy

Edition number

1

Pages from

44

Pages to

51

Pages count

8

URL

http://economic-research.pl/Books/index.php/eep/catalog/view/54/56/77-1

BibTex

@inproceedings{BUT161626,
  author="Matěj {Gryč} and Marek {Zinecker}",
  title="Private equity and venture capital: what macroeconomic and institutional factors do drive the demand side in Central and Eastern European markets?",
  booktitle="Proceedings of the  International Conference  on Applied Economics:  Finance",
  year="2019",
  series="Contemporary Issues in Economy",
  number="1",
  pages="44--51",
  publisher="Institute of Economic Research",
  address="Torun/Poland",
  doi="10.24136/eep.proc.2019.2",
  isbn="978-83-65605-12-2",
  url="http://economic-research.pl/Books/index.php/eep/catalog/view/54/56/77-1"
}