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Venture Capital and Industry Structure: Evidence from Local US Markets


  • Alexander Popov


I use a panel of US manufacturing industries to test how venture capital (VC) affects the size distribution of business firms. The estimates suggest that an increase in the supply of VC affects positively mean firm size by increasing the relative share of medium-sized and larger firms. These results are robust to specifications that address the endogeneity in the supply of VC. The empirical evidence is consistent with the idea that VC promotes the "elitization" of firm entry.

Suggested Citation

  • Alexander Popov, 2014. "Venture Capital and Industry Structure: Evidence from Local US Markets," Review of Finance, European Finance Association, vol. 18(3), pages 1059-1096.
  • Handle: RePEc:oup:revfin:v:18:y:2014:i:3:p:1059-1096.

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    Cited by:

    1. Sofie De Prijcker & Sophie Manigart & Veroniek Collewaert & Tom Vanacker, 2019. "Relocation to Get Venture Capital: A Resource Dependence Perspective," Entrepreneurship Theory and Practice, , vol. 43(4), pages 697-724, July.
    2. Tereza Tykvov√°, 2018. "Venture capital and private equity financing: an overview of recent literature and an agenda for future research," Journal of Business Economics, Springer, vol. 88(3), pages 325-362, May.
    3. Popov, Alexander, 2017. "Evidence on finance and economic growth," Working Paper Series 2115, European Central Bank.

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