The Impact of Venture Capital on Economic Growth

Steven Poelhekke and Benjamin Wache
Additional contact information
Benjamin Wache: CPB Netherlands

No 23-050/VIII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Does venture capital (VC) investment yield economic growth? A large literature studies the effect of VC investments on firm-level activity, but its effects on economic growth are less well understood. We identify the effect of VC investment flows on destination county employment, wages, and establishment creation, using a novel instrument that captures the ‘social connectedness’ of counties to major sources of VC investment. Using detailed data on VC flows from investors to companies, we find a large positive impact of VC investment, suggesting that strong social connections to large venture capital hubs are an important contributor to regional economic growth.

Keywords: Growth; venture capital; social connectedness (search for similar items in EconPapers)
JEL-codes: G24 G41 R11 (search for similar items in EconPapers)
Date: 2023-08-30
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-fdg, nep-geo, nep-gro and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://papers.tinbergen.nl/23050.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20230050

Access Statistics for this paper

More papers in Tinbergen Institute Discussion Papers from Tinbergen Institute Contact information at EDIRC.
Bibliographic data for series maintained by Tinbergen Office +31 (0)10-4088900 ().