The political and legal determinants of venture capital investments around the world

The political and legal determinants of venture capital investments around the world This paper investigates the political and legal determinants of cross-country differences in venture capital (VC) investments. Our results show strong and positive effects of a favorable sociopolitical and entrepreneurial environment on the inception and development of VC investment activity. Controlling for effects due to the legal system prevailing in each country, we find strong evidence that this factor plays an important role in explaining cross-sectional variance. This result conveys important normative implications: entrepreneurship and innovation benefit significantly from an active VC industry, which also allows the ignition of virtuous cycles. Activating this cycle, though, relies on some socioeconomic prerequisites that government and institutions should primarily address. Small Business Economics Springer Journals

The political and legal determinants of venture capital investments around the world

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Springer US
Copyright © 2011 by Springer Science+Business Media, LLC.
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
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