Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282863 
Year of Publication: 
2023
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2023-050/VIII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
Does venture capital (VC) investment yield economic growth? A large literature studies the effect of VC investments on firm-level activity, but its effects on economic growth are less well understood. We identify the effect of VC investment flows on destination county employment, wages, and establishment creation, using a novel instrument that captures the 'social connectedness' of counties to major sources of VC investment. Using detailed data on VC flows from investors to companies, we find a large positive impact of VC investment, suggesting that strong social connections to large venture capital hubs are an important contributor to regional economic growth.
Subjects: 
Growth
venture capital
social connectedness
JEL: 
R11
G24
G41
Document Type: 
Working Paper

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