This paper attempts to evaluate the macroeconomic impact of venture capital (VC). We test the assumption that VC is similar in several respects to business R&D performed by large firms and therefore contributes to economic growth through two main channels: innovation and absorptive capacity. The quantitative results, based on a panel of 16 OECD countries from 1990 to 2001, show that the social return of VC is significantly higher than the social return of business or public R&D. An increased VC intensity also makes it easier to absorb the knowledge generated by universities and firms. --
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Astrid Romain & Bruno Van Pottelsberghe, 2004.
"The economic impact of venture capital,"
Working Papers CEB
04-014.RS, Université Libre de Bruxelles, Solvay Brussels School of Economics and Management, Centre Emile Bernheim (CEB).
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Find related papers by JEL classification: G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
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