Samila Sorenson (2011) - Venture Capital Entrepreneurship And Economic Growth
|Has bibtex key
|Has article title
|Venture Capital Entrepreneurship And Economic Growth
|© edegan.com, 2016
- This page is referenced in The NBER Entrepreneurship Research Boot Camp Page
- Samila, Sampsa and Olav Sorenson (2011), "Venture Capital, Entrepreneurship, and Economic Growth", Review of Economics and Statistics, 93: 338-349 pdf
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-howto their employees, thereby enabling spin-offs, and may encourage others to become entrepreneurs through demonstration effects.