Title: The contribution of venture capital to modern systems of innovation: a critical review

Authors: Michael Peneder

Addresses: Austrian Institute of Economic Research (WIFO), P.O. Box 91, A-1030 Vienna, Austria

Abstract: The paper examines the empirical evidence on economic impacts of venture capital. At the macro-level, the consistently positive and significant statistical associations with the share of knowledge intensive industries, higher education, participation in lifelong learning, R&D expenditures or patent applications reveal it to be an integral part of modern systems of innovation. A critical review of studies estimating the precise impact of venture capital, among others, on corporate growth, patent output, survival or technical efficiency illuminates a varied spectrum of particular transmission channels. However, the review also points at an imbalance in the analytical focus of most studies, targeting the presumed value added function of venture capital, while largely ignoring its specific financing and selection function.

Keywords: venture capital; innovation systems; productivity; firm growth; impact analysis; performance management; public sector; corporate growth; economic impact; patents; intellectual property; financial markets; R&D expenditure; research and development; technical efficiency.

DOI: 10.1504/IJPSPM.2009.029118

International Journal of Public Sector Performance Management, 2009 Vol.1 No.3, pp.245 - 259

Published online: 04 Nov 2009 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article