The Economic Impact of Venture Capital

Bruno van Pottelsberghe de la Potterie and Astrid Romain

No 2004,18, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank, Research Centre

Abstract: This paper attempts to evaluate the macroeconomic impact of venture capital (VC). We test the assumption that VC is similar in several respects to business R&D performed by large firms and therefore contributes to economic growth through two main channels: innovation and absorptive capacity. The quantitative results, based on a panel of 16 OECD countries from 1990 to 2001, show that the social return of VC is significantly higher than the social return of business or public R&D. An increased VC intensity also makes it easier to absorb the knowledge generated by universities and firms.

Keywords: Venture Capital; Productivity Growth; Innovation; Absorptive Capacity (search for similar items in EconPapers)
JEL-codes: G24 D24 O32 O33 (search for similar items in EconPapers)
Date: 2004
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Related works:
Working Paper: The Economic Impact of Venture Capital (2003)
Working Paper: The economic impact of venture capital (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:zbw:bubdp1:2163

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