Measuring the Spillovers of Venture Capital

51 Pages Posted: 20 Sep 2017

See all articles by Monika Schnitzer

Monika Schnitzer

University of Munich - Department of Economics; Centre for Economic Policy Research (CEPR)

Martin Watzinger

Ludwig Maximilian University of Munich (LMU)

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Date Written: August 31, 2017

Abstract

We provide the first measurement of knowledge spillovers from venture capital-financed companies onto the patenting activities of other companies. On average, these spillovers are nine times larger than those generated by the R&D investment of established companies. Spillover effects are larger in complex product industries than in discrete product industries. Start-ups with experienced inventors holding a patent at the time of receiving the first round of investment produce the largest spillovers, indicating that venture capital fosters the commercialization of technologies. Methodologically, we contribute by developing a novel definition of the spillover pool, combining citation-based and technological proximity-based approaches.

Keywords: venture capital, spillovers, innovation

JEL Classification: G240, O300, O310, O320

Suggested Citation

Schnitzer, Monika and Watzinger, Martin, Measuring the Spillovers of Venture Capital (August 31, 2017). CESifo Working Paper Series No. 6623. Available at SSRN: https://ssrn.com/abstract=3038646

Monika Schnitzer (Contact Author)

University of Munich - Department of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany
+49 89 2180 2217 (Phone)
+49 89 2180 2767 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Martin Watzinger

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

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