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Technifying Ventures

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Abstract

The adoption of advanced technologies has important implications for employment and growth. The analysis of firm-level data from US Census Bureau indicates that firms with advanced technologies are disproportionately backed by venture capital (VC). While both advanced technology use and VC backing separately matter significantly for firm outcomes, VC backing has a larger effect on firms with advanced technology. A model of startups is constructed featuring decisions to use advanced technology and VC. The model is matched up with facts about firms' employment, technology use, and VC reliance. The implications of business taxation and subsidies are studied, and the significance of the availability of advanced technology and VC in the economy is quantified.

Suggested Citation

  • Yoshiki Ando & Emin Dinlersoz & Jeremy Greenwood & Ruben Piazzesi, 2025. "Technifying Ventures," Economie d'Avant Garde Research Reports 40, Economie d'Avant Garde.
    • Handle: RePEc:eag:rereps:40
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    Keywords

    Advanced technology; banks; capital gains taxation; corporate income taxation; difference-in-difference analysis; employment; firm-level data; reallocation effect; startups; subsidies; synergy; venture capital; technology adoption; US Census data;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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