IDEAS home Printed from https://ideas.repec.org/a/spr/lsprsc/v10y2017i2d10.1007_s12076-017-0184-z.html
   My bibliography  Save this article

Further evidence on the geographical concentration of venture capital investments

Author

Listed:
  • Simon K. Medcalfe

    (Augusta University)

  • Mark A. Thompson

    (Augusta University)

Abstract

This study provides an alternative examination into the dynamics of US venture capital investments across different geographical markets. A simple concentration index is developed to measure the size of venture capital investments by region relative to the US total venture capital investments. The time-series properties of this concentration index are examined; in particular, a series of unit root tests are employed to examine whether shocks to the index are temporary. Findings indicate that the geographical concentration of venture capital is increasing over time but shocks are temporary.

Suggested Citation

  • Simon K. Medcalfe & Mark A. Thompson, 2017. "Further evidence on the geographical concentration of venture capital investments," Letters in Spatial and Resource Sciences, Springer, vol. 10(2), pages 229-235, July.
    • Handle: RePEc:spr:lsprsc:v:10:y:2017:i:2:d:10.1007_s12076-017-0184-z
    DOI: 10.1007/s12076-017-0184-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12076-017-0184-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12076-017-0184-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vladimir Vladimirovich Kolmakov & Aleksandra Grigorievna Polyakova & Vasily Sergeevich Shalaev, 2015. "An Analysis Of The Impact Of Venture Capital Investment On Economic Growth And Innovation: Evidence From The Usa And Russia," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 60(207), pages 7-38, September.
    2. Lo, Andrew W. & MacKinlay, A. Craig, 1989. "The size and power of the variance ratio test in finite samples : A Monte Carlo investigation," Journal of Econometrics, Elsevier, vol. 40(2), pages 203-238, February.
    3. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
    4. Moretti, Enrico & Wilson, Daniel J., 2014. "State incentives for innovation, star scientists and jobs: Evidence from biotech," Journal of Urban Economics, Elsevier, vol. 79(C), pages 20-38.
    5. Joshua Lerner, 2002. "Boom and bust in the venture capital industry and the impact on innovation," Economic Review, Federal Reserve Bank of Atlanta, vol. 87(Q4), pages 25-39.
    6. Bertoni, Fabio & Colombo, Massimo G. & Grilli, Luca, 2011. "Venture capital financing and the growth of high-tech start-ups: Disentangling treatment from selection effects," Research Policy, Elsevier, vol. 40(7), pages 1028-1043, September.
    7. T. Parker Ballinger & Bradley T. Ewing & Mark A. Thompson, 2013. "Rivalry and the dynamic instability of venture capital investment shares," Applied Economics Letters, Taylor & Francis Journals, vol. 20(12), pages 1150-1154, August.
    8. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
    9. Samuel Kortum & Josh Lerner, 2000. "Assessing the Contribution of Venture Capital to Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 674-692, Winter.
    10. Matthew J. Higgins & Daniel Levy & Andrew T. Young, 2006. "Growth and Convergence across the United States: Evidence from County-Level Data," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 671-681, November.
    11. Hellmann, Thomas & Puri, Manju, 2000. "The Interaction between Product Market and Financing Strategy: The Role of Venture Capital," The Review of Financial Studies, Society for Financial Studies, vol. 13(4), pages 959-984.
    12. Yixi Ning & Wei Wang & Bo Yu, 2015. "The driving forces of venture capital investments," Small Business Economics, Springer, vol. 44(2), pages 315-344, February.
    13. Maryann Feldman, 1999. "The New Economics Of Innovation, Spillovers And Agglomeration: Areview Of Empirical Studies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 8(1-2), pages 5-25.
    14. Rin, Marco Da & Hellmann, Thomas & Puri, Manju, 2013. "A Survey of Venture Capital Research," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, volume 2, chapter 0, pages 573-648, Elsevier.
    15. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
      • Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence," Papers 645, Yale - Economic Growth Center.
      • Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Convergence," Scholarly Articles 3451299, Harvard University Department of Economics.
    16. Paul A. Gompers & Josh Lerner, 1998. "What Drives Venture Capital Fundraising?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1998 Micr), pages 149-204.
    17. Amitrajeet Batabyal, 2010. "An analysis of adverse selection, entrepreneurial activity, and the decision to go public," Letters in Spatial and Resource Sciences, Springer, vol. 3(2), pages 79-90, July.
    18. Andrew W. Lo, A. Craig MacKinlay, 1988. "Stock Market Prices do not Follow Random Walks: Evidence from a Simple Specification Test," The Review of Financial Studies, Society for Financial Studies, vol. 1(1), pages 41-66.
    19. MacKinnon, James G, 1996. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(6), pages 601-618, Nov.-Dec..
    20. Chow, K. Victor & Denning, Karen C., 1993. "A simple multiple variance ratio test," Journal of Econometrics, Elsevier, vol. 58(3), pages 385-401, August.
    21. Ballinger, T. Parker & Habegger, Wendy & Jones, Clifton T. & Thompson, Mark A., 2016. "Convergence in Venture Capital Investments: Evidence from a Panel of 18 US Regions," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(2), December.
    22. Thomas Gehrig & Rune Stenbacka, 2003. "Venture Cycles: Theory and Evidence," CESifo Working Paper Series 882, CESifo.
    23. Henry Chen & Paul Gompers & Anna Kovner & Josh Lerner, 2010. "Buy Local? The Geography of Venture Capital," NBER Chapters, in: Cities and Entrepreneurship, National Bureau of Economic Research, Inc.
    24. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    25. Samila, Sampsa & Sorenson, Olav, 2010. "Venture capital as a catalyst to commercialization," Research Policy, Elsevier, vol. 39(10), pages 1348-1360, December.
    26. Akio Matsumoto & Ugo Merlone & Ferenc Szidarovszky, 2012. "Some notes on applying the Herfindahl--Hirschman Index," Applied Economics Letters, Taylor & Francis Journals, vol. 19(2), pages 181-184, February.
    27. Sleuwaegen, Leo & Boiardi, Priscilla, 2014. "Creativity and regional innovation: Evidence from EU regions," Research Policy, Elsevier, vol. 43(9), pages 1508-1522.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Caleb Gallemore & Kristian Roed Nielsen & Kristjan Jespersen, 2019. "The uneven geography of crowdfunding success: Spatial capital on Indiegogo," Environment and Planning A, , vol. 51(6), pages 1389-1406, September.
    2. Sascha Sardadvar, 2018. "Is a Company’s Access to Private Equity and Venture Capital Affected by Location or Management Diversity? Some Empirical Evidence from Austria," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(7), pages 1-45, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ballinger, T. Parker & Habegger, Wendy & Jones, Clifton T. & Thompson, Mark A., 2016. "Convergence in Venture Capital Investments: Evidence from a Panel of 18 US Regions," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(2), December.
    2. T. Parker Ballinger & Bradley T. Ewing & Mark A. Thompson, 2013. "Rivalry and the dynamic instability of venture capital investment shares," Applied Economics Letters, Taylor & Francis Journals, vol. 20(12), pages 1150-1154, August.
    3. Evan Lau & Koon Po Lee, 2008. "Interdependence of income between China and ASEAN‐5 countries," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing Limited, vol. 1(2), pages 148-161, June.
    4. Carolin Bock & Martin Watzinger, 2019. "The Capital Gains Tax: A Curse but Also a Blessing for Venture Capital Investment," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(4), pages 1200-1231, October.
    5. Da Rin, Marco, 2016. "Financing Growth through Venture Capital in Asia and the Pacific," Other publications TiSEM 9fb91a28-6b54-41ce-a01d-9, Tilburg University, School of Economics and Management.
    6. Le Pen, Yannick, 2011. "A pair-wise approach to output convergence between European regions," Economic Modelling, Elsevier, vol. 28(3), pages 955-964, May.
    7. Francesco Guidi & Rakesh Gupta, 2011. "Are ASEAN stock market efficient? Evidence from univariate and multivariate variance ratio tests," Discussion Papers in Finance finance:201113, Griffith University, Department of Accounting, Finance and Economics.
    8. Aye, Goodness C. & Gil-Alana, Luis A. & Gupta, Rangan & Wohar, Mark E., 2017. "The efficiency of the art market: Evidence from variance ratio tests, linear and nonlinear fractional integration approaches," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 283-294.
    9. Lohwasser, Todor S., 2020. "Meta-analyzing the relative performance of venture capital-backed firms," Discussion Papers of the Institute for Organisational Economics 4/2020, University of Münster, Institute for Organisational Economics.
    10. Doyle, John R. & Chen, Catherine Huirong, 2012. "A multidimensional classification of market anomalies: Evidence from 76 price indices," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(5), pages 1237-1257.
    11. Tilak Abeysinghe & Gulasekaran Rajaguru, 2009. "A Gaussian Test for Cointegration," Microeconomics Working Papers 22013, East Asian Bureau of Economic Research.
    12. Christian Keuschnigg, 2008. "Tax Policy for Venture Capital Backed Entrepreneurship," University of St. Gallen Department of Economics working paper series 2008 2008-07, Department of Economics, University of St. Gallen.
    13. Andrea Schertler, 2007. "Knowledge Capital and Venture Capital Investments: New Evidence from European Panel Data," German Economic Review, Verein für Socialpolitik, vol. 8(1), pages 64-88, February.
    14. Rudra P. Pradhan & Mak B. Arvin & Mahendhiran Nair & Sara E. Bennett, 2017. "Venture capital investment, financial development, and economic growth: the case of European single market countries," Venture Capital, Taylor & Francis Journals, vol. 19(4), pages 313-333, October.
    15. Josh Lerner & Joacim Tåg, 2013. "Institutions and venture capital," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(1), pages 153-182, February.
    16. Hirnissa, M.T & Habibullah, M.S., 2008. "Finance and other services sectors in Peninsular Malaysia, Sabah and Sarawak: Testing for stochastic convergence," MPRA Paper 12108, University Library of Munich, Germany.
    17. Rudra P. Pradhan & Rana P. Maradana & Danish B. Zaki & Saurav Dash & Manju Jayakumar & Kunal Gaurav, 2017. "Venture Capital and Innovation: Evidence from European Economic Area Countries," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 14(06), pages 1-30, December.
    18. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    19. Bertoni, Fabio & Tykvová, Tereza, 2015. "Does governmental venture capital spur invention and innovation? Evidence from young European biotech companies," Research Policy, Elsevier, vol. 44(4), pages 925-935.
    20. Dutta, Supradeep & Folta, Timothy B., 2016. "A comparison of the effect of angels and venture capitalists on innovation and value creation," Journal of Business Venturing, Elsevier, vol. 31(1), pages 39-54.

    More about this item

    Keywords

    Venture capital investments; Regions; Shocks; Unit root tests; Concentration;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:lsprsc:v:10:y:2017:i:2:d:10.1007_s12076-017-0184-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.