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Measuring the Spillovers of Venture Capital

Author

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  • Monika Schnitzer
  • Martin Watzinger

Abstract

We provide the first measurement of knowledge spillovers from venture capital-financed companies onto the patenting activities of other companies. On average, these spillovers are nine times larger than those generated by the R&D investment of established companies. Spillover effects are larger in complex product industries than in discrete product industries. Start-ups with experienced inventors holding a patent at the time of receiving the first round of investment produce the largest spillovers, indicating that venture capital fosters the commercialization of technologies. Methodologically, we contribute by developing a novel definition of the spillover pool, combining citation-based and technological proximity-based approaches.

Suggested Citation

  • Monika Schnitzer & Martin Watzinger, 2017. "Measuring the Spillovers of Venture Capital," CESifo Working Paper Series 6623, CESifo.
    • Handle: RePEc:ces:ceswps:_6623
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    Cited by:

    1. Leogrande, Angelo & Costantiello, Alberto & Laureti, Lucio, 2021. "The Impact of Venture Capital Expenditures on Innovation in Europe," MPRA Paper 109897, University Library of Munich, Germany.
    2. VEUGELERS Reinhilde & AMARAL-GARCIA Sofia, 2025. "Financing EU Health Innovation: the role of Venture Capital," JRC Working Papers on Corporate R&D and Innovation 2025-01, Joint Research Centre.
    3. Daron Acemoglu & Ufuk Akcigit & William R. Kerr, 2016. "Innovation Network," CESifo Working Paper Series 6173, CESifo.
    4. Ningyue Liu & Tailun Chen & Huijuan Cao, 2025. "Geographic network characteristics of venture capital firms and high-tech enterprise innovation: evidence from high-speed rail," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-12, December.
    5. Maebayashi, Noritaka & Morimoto, Keiichi, 2024. "Global corporate income tax competition, knowledge spillover, and growth," European Economic Review, Elsevier, vol. 164(C).
    6. Myeongwan Kim, John Lester, 2019. "R&D Spillovers in Canadian Industry: Results from a New Micro Database," CSLS Research Reports 2019-02, Centre for the Study of Living Standards.
    7. McShane, William & Sevilir, Merih, 2023. "R&D tax credits and the acquisition of startups," IWH Discussion Papers 15/2023, Halle Institute for Economic Research (IWH).
    8. Myeongwan Kim, 2019. "Does Import Competition Reduce Domestic Innovation? Evidence from the 'China Stock' and Firm-Level Data on Canadian Manufacturing," CSLS Research Reports 2019-03, Centre for the Study of Living Standards.
    9. Elstner, Steffen & Grimme, Christian & Kecht, Valentin & Lehmann, Robert, 2022. "The diffusion of technological progress in ICT," European Economic Review, Elsevier, vol. 149(C).
    10. Maebayashi, Noritaka & Morimoto, Keiichi, 2022. "Global Corporate Income Tax Competition, Knowledge Spillover, and Growth," MPRA Paper 112790, University Library of Munich, Germany.
    11. Steven Poelhekke & Benjamin Wache, 2023. "The Impact of Venture Capital on Economic Growth," Tinbergen Institute Discussion Papers 23-050/VIII, Tinbergen Institute.
    12. Jayaprada Putrevu & Charilaos Mertzanis & Ilias Kampouris, 2025. "Sustainable investment conditions, venture capital, and new business creation," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-37, December.
    13. Maebayashi, Noritaka & Morimoto, Keiichi, 2022. "Global Corporate Income Tax Competition, Knowledge Spillover, and Growth," MPRA Paper 112781, University Library of Munich, Germany.
    14. Signore, Simone & Torfs, Wouter, 2017. "The European venture capital landscape: an EIF perspective. Volume IV: The value of innovation for EIF-backed startups," EIF Working Paper Series 2017/45, European Investment Fund (EIF).
    15. Kovács, Olivér, 2020. "Gazellák az iparpolitika tükrében, I [Gazelles and industrial policy, Part 1]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 54-87.
    16. Myeongwan Kim, John Lester, 2019. "R&D Spillovers in Canadian Industry: Results from a New Micro Database," CSLS Research Reports 2019-02, Centre for the Study of Living Standards.
    17. Gill, Andrej & Heller, David & Michel, Nina A., 2024. "Enabling or accelerating? The timing of innovation and the different roles of venture capitalists," Research Policy, Elsevier, vol. 53(8).
    18. Joshua L. Krieger, 2021. "Trials and Terminations: Learning from Competitors’ R&D Failures," Management Science, INFORMS, vol. 67(9), pages 5525-5548, September.
    19. Myeongwan Kim, 2019. "Does Import Competition Reduce Domestic Innovation? Evidence from the 'China Stock' and Firm-Level Data on Canadian Manufacturing," CSLS Research Reports 2019-03, Centre for the Study of Living Standards.
    20. Weik, Stefan & Achleitner, Ann-Kristin & Braun, Reiner, 2024. "Venture capital and the international relocation of startups," Research Policy, Elsevier, vol. 53(7).

    More about this item

    Keywords

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    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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