The Impact of Venture Capital Expenditures on Innovation in Europe

Abstract

We investigate the relationship between “Venture Capital Expenditures” and innovation in Europe. Data are collected from the European Innovation Scoreboard for 36 countries in the period 2010-2019. We perform Panel Data with Fixed Effects, Panel Data with Random Effects, Pooled OLS, WLS, Dynamic Panel. Results show that the level of Venture Capitalist Expenditure is positively associated to “Foreign Doctorate Students” and “Innovation Index” and negatively related to “Government Procurement of Advanced Technology Products”, “Innovators”, “Medium and High-Tech Products Exports”, “Public-Private Co-Publications”. In adjunct, cluster analysis is realized with the algorithm k-Means and the Silhouette coefficient, and we found the presence of four different clusters for the level of “Venture Capital Expenditures”. Finally, we propose a confrontation among 8 different algorithms of machine learning to predict the level of “Venture Capital Expenditures” and we find that the linear regression generates the best results in terms of minimization of MAE, MSE, RMSE.

The Export of Medium and High-Tech Products Manufactured in Europe

“…In this sense, it is necessary to consider that only investment in research and development can truly support that technological innovation that allows companies to export medium and high technology products abroad [27]. • Finance and support: is an indicator consisting of the sum of three different sub-variables, namely: R&D expenditure in the public sector and Venture capital expenditures [28]. Therefore, the variable considers the possibility of financing research and development both with public resources and with venture capital investments.…”

The Export of Medium and High-Tech Products Manufactured in Europe

“…R&D expenditure in the public sector and Venture capital expenditures [28]. Therefore, the variable considers the possibility of financing research and development both with public resources and with venture capital investments.…”

The Exports of Knowledge Intensive Services. A Complex Metric Approach

“…The analysis therefore shows the presence of a positive relationship between the investment in the risk capital of companies and the presence of companies exporting knowledge-intensive services abroad. In fact, these two elements could be closely connected, since generally startups, especially when they produce innovative services, also have a very significant orientation towards exports [16]. • Top R&D spending enterprises per 10 mln population: is an indicator that considers the R&D expenditure of the 2,500 largest companies in the world compared to the population of the country in which they are based.…”