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Convergence in Venture Capital Investments: Evidence from a Panel of 18 US Regions

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  • Ballinger, T. Parker
  • Habegger, Wendy
  • Jones, Clifton T.
  • Thompson, Mark A.

Abstract

This empirical study examines the time series properties of U.S. venture capital investments across different geographical markets. Using a battery of panel unit root tests, we find substantial evidence of stochastic convergence in that (relative) venture capital investment shares are stationary. Our findings indicate that venture capital investment shocks are temporary and tend to adjust back to their respective long - run means. These results are supportive of convergence in economic activity as there may be diminishing returns to venture capital. As such, regional policymakers may use historical data to make projections and capital allocation decisions with regards to investment in entrepreneurial activities.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:jrapmc:262576
    DOI: 10.22004/ag.econ.262576
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    Cited by:

    1. Apergis, Nicholas & Payne, James E., 2017. "Convergence in Venture Capital Investments across U.S. Regions: An Extension of the Ballinger et al. (2016) Study," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 48(1), November.
    2. 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.

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