Title: Venture capital and economic growth in the local markets

Authors: Nada Kobeissi, Haizhi Wang

Addresses: Department of Management, C.W. Post – Long Island University, 700 Northern Boulevard, Brookville, New York 11548, USA. ' Stuart School of Business, Illinois Institute of Technology, 565 Adams St., Chicago, Illinois 60661, USA

Abstract: Entrepreneurship involves mobilising resources in pursuit of opportunities in the founding of new businesses. During the entrepreneurial process, resource acquisition, especially financial resources, are crucial for bringing innovative ideas into reality. As professional investors and important financial intermediary, venture capitalists are recognised for financing innovative entrepreneurial companies and providing a significant share of the total pool of risk capital for new firms with high growth potential. While there is a growing sense among academic researchers that the US economy especially benefits from a strong and prosperous venture capital industry, empirical evidence, however, of such benefits are still scant. This paper, therefore, provides empirical examination of the real effect of venture capital investments. It finds supportive and robust evidence of significant effect of such investments on US regional economic development.

Keywords: venture capital; employment; economic growth; local markets; entrepreneurship; new businesses; resource acquisition; innovation; investment; risk capital; USA; United States; growth potential; regional economic development; public policy; performance management.

DOI: 10.1504/IJPSPM.2009.029122

International Journal of Public Sector Performance Management, 2009 Vol.1 No.3, pp.312 - 324

Published online: 04 Nov 2009 *

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