The Political and Legal Determinants of Venture Capital Investments around the World

34 Pages Posted: 16 Nov 2006 Last revised: 10 Apr 2011

See all articles by Stefano Bonini

Stefano Bonini

Stevens Institute of Technology - School of Business

Senem Alkan Aktuccar

Bocconi University

Date Written: March 23, 2011

Abstract

This paper investigates the political and legal determinants of cross-country differences in 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.

Keywords: Venture Capital, Political risk, Entrepreneurship

JEL Classification: G24, G32, F21

Suggested Citation

Bonini, Stefano and Alkan Aktuccar, Senem, The Political and Legal Determinants of Venture Capital Investments around the World (March 23, 2011). Available at SSRN: https://ssrn.com/abstract=945312 or http://dx.doi.org/10.2139/ssrn.945312

Stefano Bonini (Contact Author)

Stevens Institute of Technology - School of Business ( email )

Hoboken, NJ 07030
United States

Senem Alkan Aktuccar

Bocconi University ( email )

Via Sarfatti, 25
Milan, MI 20136
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
742
Abstract Views
2,695
rank
36,270
PlumX Metrics