Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19486
Authors: 
van Pottelsberghe de la Potterie, Bruno
Romain, Astrid
Year of Publication: 
2004
Series/Report no.: 
Discussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2004,19
Abstract: 
This paper attempts to identify and evaluate the main determinants of venture capital (VC). We develop a theoretical model where macroeconomic conditions, technological opportunity, and the entrepreneurial environment affect the demand and supply of VC. The quantitative results, based on a panel dataset of 16 OECD countries from 1990 to 2000, show that VC intensity is pro-cyclical. Interest rates affect more the demand side of VC (entrepreneurs) than the supply side. Indicators of technological opportunity, such as the stock of knowledge and the number of triadic patents affect positively and significantly the relative level of VC. Labour market rigidities reduce the impact of the GDP growth rate and of the stock of knowledge, whereas a minimum level of entrepreneurship is required in order to have a positive effect of the available stock of knowledge on VC intensity.
Subjects: 
Venture Capital
Technological Opportuniy
Entrepreneurship
Labour Market Regidities
JEL: 
O33
G24
M13
C33
Document Type: 
Working Paper

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