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Technifying Ventures

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Abstract

How do advanced technology adoption and venture capital (VC) funding impact employment and growth? An analysis of data from the US Census Bureau shows that while both advanced technology use and VC funding are important on their own for firm outcomes, their combination has the strongest effect. VC tends to have a bigger impact, but it affects only a small number of firms, while technology adoption has a smaller impact but affects many more firms. A model of startups is created, focusing on decisions to use technology and seek VC funding. The model is compared with firm-level data on employment, technology use, and VC investment. The study also looks at the effects of business taxes and subsidies, and measures the overall importance of technology and VC in the economy.

Suggested Citation

  • Yoshiki Ando & Emin Dinlersoz & Jeremy Greenwood & Ruben Piazzesi, 2025. "Technifying Ventures," Economie d'Avant Garde Research Reports 40, Economie d'Avant Garde.
    • Handle: RePEc:eag:rereps:40
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    References listed on IDEAS

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    1. Emin Dinlersoz & Nathan Goldschlag & Mehmet Yorukoglu & Nikolas Zolas, 2023. "On The Role of Trademarks: From Micro Evidence to Macro Outcomes," Working Papers 23-16, Center for Economic Studies, U.S. Census Bureau.
    2. Williamson, Stephen D., 1986. "Costly monitoring, financial intermediation, and equilibrium credit rationing," Journal of Monetary Economics, Elsevier, vol. 18(2), pages 159-179, September.
    3. Kathryn Bonney & Cory Breaux & Cathy Buffington & Emin Dinlersoz & Lucia S. Foster & Nathan Goldschlag & John C. Haltiwanger & Zachary Kroff & Keith Savage, 2024. "Tracking Firm Use of AI in Real Time: A Snapshot from the Business Trends and Outlook Survey," NBER Working Papers 32319, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Advanced technology; banks; capital gains taxation; corporate income taxation; difference-in-difference analysis; employment; firm-level data; reallocation effect; startups; subsidies; synergy; venture capital; technology adoption; US Census data;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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