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Relations between country R&D expenses and startup IPO in Europe: Empirical research of startup IPO activities from 2005 to 2014


This paper put an attempt to find the impact of money supply, specifically in promoting research and development, of EU countries contributes in successes of startup IPO process. The paper is formulated to prove the hypothesis that the number of money supply in R&D affect the number of IPO within EU countries. This hypothesis comes from the previous research about the impact of patent in reducing asymmetric information of the firm before going to IPO. The model comes from Schumpeter assumption that economic growth is an effect of knowledge accumulation. The data come from 17 countries in Europe. The model is a data panel regression. The variables that used are number of IPO as dependent variable and number of money supply in research and development as independent variable. We use 10 years’ data range period from 2005 until 2014. The paper finds the robust relationship between countries research and development expenses and the number of IPO activities in 17 European countries. This research will contribute in providing empirical research about the relationship between favourable research environment (proxied by money supply in R&D) and firms IPO. The expectation is a government will promote and allocate more fiscal project in research and development.


IPO, startup, FDI, investment, Schumpeter



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