Journal Article
An Elementary Model of VC Financing and Growth
Abstract: This article uses an endogenous growth model to study how the improvements in financing for innovative start-ups brought by venture capital (VC) affect firm innovation and growth. Partial equilibrium results show how lending contracts change as financing efficiency improves, while general equilibrium results show that better screening and development of projects by VC investors leads to higher aggregate productivity growth.
Keywords: venture capital; start-ups;
JEL Classification: E13; E22; G24; L26; O16; O31; O40;
https://doi.org/10.20955/r.105.66-73
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Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Review
Publication Date: 2023-01-20
Volume: 105
Issue: 1
Pages: 66-73