publication . Other literature type . Part of book or chapter of book . Preprint . Report . 2004

Does venture capital spur innovation?

Samuel Kortum; Josh Lerner;
Open Access
  • Published: 19 May 2004
  • Publisher: Emerald (MCB UP )
Abstract
While policymakers often assume venture capital has a profound impact on innovation, that premise has not been evaluated systematically. We address this omission by examining the influence of venture capital on patented inventions in the United States across twenty industries over three decades. We address concerns about causality in several ways, including exploiting a 1979 policy shift that spurred venture capital fundraising. We find that the amount of venture capital activity in an industry significantly increases its rate of patenting. While the ratio of venture capital to R&D has averaged less than 3% in recent years, our estimates suggest that venture cap...

U.S. National Science Foundation, Division of Science Resource Studies, 1997, Survey of research and development in industry, http://www.nsf.gov/sbe/srs/sird/start.htm.

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