IDEAS home Printed from https://ideas.repec.org/a/spr/epolin/v52y2025i2d10.1007_s40812-024-00333-0.html
   My bibliography  Save this article

The interplay of institutional quality and financial development in venture capital fundraising

Author

Listed:
  • Muhammad Zubair Khan

    (University of Science and Technology Bannu)

  • Walter Ferrier

    (University of Kentucky)

  • Zafir Ullah Khan

    (University of Science and Technology Bannu)

  • Affan Hameed

    (University of Arts London)

Abstract

The paper explores the association between financial development and venture capital fundraising, and how that relationship varies with institutional quality. We analyze a dataset of thirty-one countries between 2005 and 2017 using a dynamic two-step system generalized method of moments (GMM) estimation technique. We find that financial development and its two components, namely financial markets, and financial institutions, exert a significant positive effect on venture capital fundraising. However, the relationship shifts with institutional quality, with positive and large effects in countries with robust legal frameworks but not in those with weak legal frameworks. The results are robust to the use of different data sources and proxies for institutional quality, as well as estimation techniques.

Suggested Citation

  • Muhammad Zubair Khan & Walter Ferrier & Zafir Ullah Khan & Affan Hameed, 2025. "The interplay of institutional quality and financial development in venture capital fundraising," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(2), pages 379-413, June.
    • Handle: RePEc:spr:epolin:v:52:y:2025:i:2:d:10.1007_s40812-024-00333-0
    DOI: 10.1007/s40812-024-00333-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40812-024-00333-0
    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/s40812-024-00333-0?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.

    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:epolin:v:52:y:2025:i:2:d:10.1007_s40812-024-00333-0. 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.

    We have no bibliographic references for this item. You can help adding them by using 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.