Assessing the Contribution of Venture Capital to Innovation

  title={Assessing the Contribution of Venture Capital to Innovation},
  author={Samuel Kortum and Josh Lerner},
  journal={The RAND Journal of Economics},
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… 

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