Venture capital adds economic spiceAuthor: Thomas Meyer
Date: September 2010
- Venture capital injects economic dynamism: An increase in VC
investments of 0.1% of GDP is statistically associated with an increase
in real GDP growth of 0.30 pp. Early-stage investments have an even
bigger impact of 0.96 pp.
- The direction of causality is not always easy to establish. Yet, tests for
Granger-causality in the biggest market, the US, suggest that causality
runs from VC-investments to growth. There is also substantial microevidence
that supports this view.
- Exuberances drive much of the correlation. Taking account of the dotcom boom and bust as well as of the financial crisis leads to lower
Type of study: Consulting research
Relevant for: Venture Capital
Source: Deutsche Bank Research