Assessing the Contribution of Venture Capital to Innovation

Name: Assessing the Contribution of Venture Capital to Innovation
Cite: 31 RAND J. of Econ. 674
Year: 2000
Bluebook cite: Samuel Kortum And Josh Lerner, Assessing The Contribution Of Venture Capital To Innovation, 31 RAND J. of Econ. 674 (Winter 2000)
Author: Samuel Kortum and Josh Lerner
URL: http://www.jstor.org/stable/2696354
Item Type: article
Summary: We examine the influence of venture capital on patented inventions in the United States across twenty industries over three decades. We address concerns about causality in several ways, including exploiting a 1979 policy shift that spurred venture capital fundraising. We find that increases in venture capital activity in an industry are associated with significantly higher patenting rates. While the ratio of venture capital to R&D averaged less than 3% from 1983-1992, our estimates suggest that venture capital may have accounted for 8% of industrial innovations in that period.