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Venture Capital, Entrepreneurship, and Economic Growth
Open accessAbstract
Using a panel of U.S. metropolitan areas, we find that increases in the supply of venture capital positively affect firm starts, employment, and aggregate income. Our results remain robust to a variety of specifications, including ones that address endogeneity. The estimated magnitudes imply that venture capital stimulates the creation of more firms than it funds, which appears consistent with two mechanisms: First, would-be entrepreneurs anticipating financing needs more likely start firms when the supply of capital expands. Second, funded companies may transfer know-how to their employees, thereby enabling spin-offs, and may encourage others to become entrepreneurs through demonstration effects.
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“(c) economic growth.”
From Finance, Growth, and Inequality (2021) · cites this paper as Samila and Sorenson (2011)
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“They find that plausibly exogenous shocks to the supply of VC investment boost (a) the rate of new business formations”
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Metadata
- Authors
- Samila, S., & Sorenson, O.
- Affiliations
- Brock University (CA)
- Yale University (US)
- Venue
- Review of Economics and Statistics
- Publisher
- MIT Press - Journals
- Published
- 2011-02
- Volume
- 93
- Issue
- 1
- Pages
- 338-349
- ISSN
- 0034-6535 (ISSN-L)
- 1530-9142
- OpenAlex
- W1990980528
- Cited by
- 673
- References
- 33
- Citations by year
- 2026: 52 · 2025: 63 · 2024: 62 · 2023: 42 · 2022: 64 · 2021: 48 · 2020: 39 · 2019: 44 · 2018: 44 · 2017: 33 · 2016: 42 · 2015: 31 · 2014: 38 · 2013: 26 · 2012: 19
- FWCI
- 74.96
- Type
- journal article
- Language
- en
- Open access
- green
- escholarship.org
- Locations
- The Review of Economics and Statistics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- eScholarship (California Digital Library) (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Private Equity and Venture Capital
- Social Sciences › Business, Management and Accounting › Management of Technology and Innovation › Entrepreneurship Studies and Influences
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Firm Innovation and Growth
- Keywords
- venture capital, entrepreneurship, economic growth, firm start-ups, employment, aggregate income, metropolitan areas, endogeneity, spin-offs, knowledge transfer, demonstration effect, startups
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