Productivity growth in Spanish venture-backed firms

This chapter presents an innovative proposal to analyze the economic impact of venture capital on investee companies to address the issue of causality. We test whether productivity growth rates are better in venture-backed companies than in comparable non-venture-backed ones for a sample of 518 Spanish companies. This approach is superior to the isolated analysis of employment or sales growth since venture-backed companies would benefit from a flow of funds that the non-venture-backed would not obtain. Our findings show that labor productivity gains are statistically higher in the venture group for industry, trade and services sectors. Regarding capital productivity growth, rates are statistically significant in all sectors except for raw materials.