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Economic and Capital Market Antecedents of Venture Capital Commitments (1960-2010)
Articles and Chapters
  • Steven A. Carvell, Cornell University
  • Jin-Young Kim, Cornell University
  • Qingzhong Ma, Cornell University
  • Andrey D. Ukhov, Cornell University
Publication Date
1-1-2013
Abstract
Using vector autoregression technique, we examine the interrelation between venture capital flows, economic development, capital market fund-raising activities, and capital market valuation, based on annual data of the United States over the past half-century. We find that venture capital commitments appear to be correlated with GDP and capital market valuation. While capital market fund-raising activities (Initial Public Offerings and Seasoned Equity Offerings) are also correlated with venture capital flows, these effects are subsumed by GDP, indicating that the overall economy drives both venture capital flows and capital market financing activities. Analyses from impulse response functions suggest that shocks to GDP have a permanent effect on venture capital flows, while the impact of capital market valuation (Standard & Poor 500 returns) on venture capital flows is rather short lived. Overall, both economy-wide development and financial market fluctuations seem to impact venture capital flows.
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Required Publisher Statement
© Springer Verlag. Final version published as: Carvell, S. A., Kim, J., Ma, Q., & Ukhov, A. D. (2013). Economic and capital market antecedents of venture capital commitments (1960-2010). International Entrepreneurship and Management Journal, 9(2), 167-182. Reprinted with permission. All rights reserved.

Citation Information

Carvell, S. A., Kim, J., Ma, Q., & Ukhov, A. D. (2013). Economic and capital market antecedents of venture capital commitments (1960-2010) [Electronic version]. Retrieved [insert date], from Cornell University, School of Hospitality Administration site:http://scholarship.sha.cornell.edu/articles/216