IDEAS home Printed from https://ideas.repec.org/a/taf/veecee/v15y2013i3p199-236.html
   My bibliography  Save this article

The geographic extent of venture capital externalities on innovation

Author

Listed:
  • Christos Kolympiris
  • Nicholas Kalaitzandonakes

Abstract

A stream of literature has demonstrated that venture capital generates externalities that enhance the knowledge base of a given region and accordingly assist firms in high-technology industries to improve their innovative performance. What has gone largely unexamined in this literature is the geographic extent of such externality impact. In this research we address the issue at hand. We do so by analyzing the association between the patenting rate of all life sciences firms (LSFs) that have won Small Business Innovation Research grants from 1983 to 2006 and the venture capital investments that have occurred at increasingly distant spatial units from those firms. Controlling for firm-specific and environmental factors as well as for endogeneity concerns, we document that LSFs tend to produce more patents whenever they are situated in very close proximity to where venture capital investments occur. Further, we find that improvements of the patenting rate of focal firms largely emanate from investments that reflect the expertise of venture capitalists on advancing existing prototypes closer to commercialization. We conclude the paper with a discussion on research and policy implications of our findings.

Suggested Citation

  • Christos Kolympiris & Nicholas Kalaitzandonakes, 2013. "The geographic extent of venture capital externalities on innovation," Venture Capital, Taylor & Francis Journals, vol. 15(3), pages 199-236, July.
  • Handle: RePEc:taf:veecee:v:15:y:2013:i:3:p:199-236
    DOI: 10.1080/13691066.2013.804749
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13691066.2013.804749
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/13691066.2013.804749?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Austin Nichols & Mark E Schaffer, 2007. "Clustered standard errors in Stata," United Kingdom Stata Users' Group Meetings 2007 07, Stata Users Group.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gregory D. Graff & Felipe de Figueiredo Silva & David Zilberman, 2020. "Venture Capital and the Transformation of Private R&D for Agriculture," NBER Chapters, in: Economics of Research and Innovation in Agriculture, pages 213-245, National Bureau of Economic Research, Inc.
    2. Hoenen, Sebastian & Kolympiris, Christos & Schoenmakers, Wilfred & Kalaitzandonakes, Nicholas, 2014. "The diminishing signaling value of patents between early rounds of venture capital financing," Research Policy, Elsevier, vol. 43(6), pages 956-989.
    3. Kolympiris, Christos & Kalaitzandonakes, Nicholas & Miller, Douglas, 2015. "Location choice of academic entrepreneurs: Evidence from the US biotechnology industry," Journal of Business Venturing, Elsevier, vol. 30(2), pages 227-254.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Beck, Thorsten & Demirgüç-Kunt, Asli & Merrouche, Ouarda, 2013. "Islamic vs. conventional banking: Business model, efficiency and stability," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 433-447.
    2. Scheiner, Joachim & Holz-Rau, Christian, 2013. "A comprehensive study of life course, cohort, and period effects on changes in travel mode use," Transportation Research Part A: Policy and Practice, Elsevier, vol. 47(C), pages 167-181.
    3. Carlos Cortinhas, 2017. "Does formative feedback help or hinder students? An empirical investigation," Discussion Papers 1701, University of Exeter, Department of Economics.
    4. Fungáčová, Zuzana & Shamshur, Anastasiya & Weill, Laurent, 2017. "Does bank competition reduce cost of credit? Cross-country evidence from Europe," Journal of Banking & Finance, Elsevier, vol. 83(C), pages 104-120.
    5. Arthur Grimes & Chris Young, 2010. "Anticipatory Effects of Rail Upgrades: Auckland’s Western Line," Working Papers 10_11, Motu Economic and Public Policy Research.
    6. Maitra, Pushkar & Pal, Sarmistha & Sharma, Anurag, 2016. "Absence of Altruism? Female Disadvantage in Private School Enrollment in India," World Development, Elsevier, vol. 85(C), pages 105-125.
    7. Fredrick M. Wamalwa & Justine Burns, 2017. "Gender and Birth Order Effects on Intra-household Schooling Choices and Education Attainments in Kenya," SALDRU Working Papers 203, Southern Africa Labour and Development Research Unit, University of Cape Town.
    8. Baskaran, Thushyanthan, 2013. "Coalition governments, cabinet size, and the common pool problem: Evidence from the German states," European Journal of Political Economy, Elsevier, vol. 32(C), pages 356-376.
    9. Joachim Scheiner & Christian Holz-Rau, 2017. "Women’s complex daily lives: a gendered look at trip chaining and activity pattern entropy in Germany," Transportation, Springer, vol. 44(1), pages 117-138, January.
    10. Andrikopoulos, Andreas & Merika, Anna & Merikas, Andreas & Sigalas, Christos, 2021. "Related party transactions and principal-principal conflicts in public companies: Evidence from the maritime shipping industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    11. Mohammad Bitar & Sami Ben Naceur & Rym Ayadi & Thomas Walker, 2021. "Basel Compliance and Financial Stability: Evidence from Islamic Banks," Journal of Financial Services Research, Springer;Western Finance Association, vol. 60(1), pages 81-134, August.
    12. Wamalwa, Fredrick M. & Burns, Justine, 2018. "Private schools and student learning achievements in Kenya," Economics of Education Review, Elsevier, vol. 66(C), pages 114-124.
    13. Eun, Cheol S. & Wang, Lingling & Xiao, Steven C., 2015. "Culture and R2," Journal of Financial Economics, Elsevier, vol. 115(2), pages 283-303.
    14. Lei, Man-Kit & Berg, Mark T. & Simons, Ronald L. & Beach, Steven R.H., 2022. "Neighborhood structural disadvantage and biological aging in a sample of Black middle age and young adults," Social Science & Medicine, Elsevier, vol. 293(C).
    15. Bonilla-Mejía, Leonardo & Galvis-Aponte, Luis Armando, 2014. "Profesionalización docente y calidad de la educación escolar en Colombia," Chapters, in: Sánchez Jabba, Andrés & Otero Cortés, Andrea (ed.), Educación y desarrollo regional en Colombia, chapter 5, pages 161-209, Banco de la Republica de Colombia.
    16. Anna Matas & José-Luis Raymond & Andrés Domínguez, 2016. "Changes in fuel economy: An analysis of the Spanish car market," Working Papers 2016/15, Institut d'Economia de Barcelona (IEB).
    17. Coulon, Sandra M. & Wilson, Dawn K. & Egan, Brent M., 2013. "Associations among environmental supports, physical activity, and blood pressure in African-American adults in the PATH trial," Social Science & Medicine, Elsevier, vol. 87(C), pages 108-115.
    18. Lars P. Feld & Jost H. Heckemeyer, 2011. "Fdi And Taxation: A Meta‐Study," Journal of Economic Surveys, Wiley Blackwell, vol. 25(2), pages 233-272, April.
    19. Asli Demirguc‐Kunt & Enrica Detragiache & Ouarda Merrouche, 2013. "Bank Capital: Lessons from the Financial Crisis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(6), pages 1147-1164, September.
    20. Christos Kolympiris & Nicholas Kalaitzandonakes, 2013. "Geographic scope of proximity effects among small life sciences firms," Small Business Economics, Springer, vol. 40(4), pages 1059-1086, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:veecee:v:15:y:2013:i:3:p:199-236. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/TVEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.