Right-to-work laws and venture capital investment

Helena Sarkodie, Kwabena Boasiako, Keefe, Michael O’Connor, Justin Nguyen and Bernard Tawiah

Journal of Banking & Finance, 2025, vol. 172, issue C

Abstract: Using state-level data from the United States covering the period 1980 to 2020, we explore the effect of right-to-work (RTW) laws on venture capital (VC) investment. Employing a difference-in-differences strategy, we find that the passage of right-to-work laws increases venture capital investment. The results are robust to omitted variable bias, reverse causality and unobservable local economic conditions. We find that the positive effect of RTW laws on VC investments remains significant in states that are highly unionized and technological.

Keywords: Unionisation; Right-to-work (RTW) laws; Venture capital (VC) investment (search for similar items in EconPapers)
JEL-codes: G30 G32 M13 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:172:y:2025:i:c:s0378426625000044

DOI: 10.1016/j.jbankfin.2025.107383

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