The Impact of Natural Disasters on Venture Capital Activity and Success

Groh Alexander, Nguyen Giang and Nguyen Thu Ha
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Groh Alexander: AMU IAE - Institut d'Administration des Entreprises (IAE) - Aix-en-Provence - AMU - Aix Marseille Université
Nguyen Giang: Waseda University [Tokyo, Japan]
Nguyen Thu Ha: Monash University [Melbourne]

Working Papers from HAL

Abstract: We document a significant decrease in venture capital (VC) activity in regions hit by climate change induced natural disasters. The detected impact is robust to different empirical settings at the VC firm- and venture-level, and to alternative definitions and measures of disasters and their damage. Furthermore, disasters affected VC-backed ventures have lower patent outputs, propensity to raise follow-on funding, and survival rates. The effect decays over time unless another catastrophe strikes. The analyses provide evidence that VC-backed ventures are substantially exposed to climate risk.

Keywords: Entrepreneurship; venture capital; natural disaster; innovation (search for similar items in EconPapers)
Date: 2025-01-19
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