Working Paper
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 demonstrate that better screening and development of projects by VC investors leads to higher aggregate productivity growth.
Keywords: endogenous growth; financial development; innovation; IPO; screening; research and development; startups; venture capital;
JEL Classification: E13; E22; G24; L26; O16; O31; O40;
https://doi.org/10.20955/wp.2022.031
Status: Published in Federal Reserve Bank of St. Louis Review
Access Documents
File(s):
File format is application/pdf
https://s3.amazonaws.com/real.stlouisfed.org/wp/2022/2022-031.pdf
Description: Full text
Bibliographic Information
Provider: Federal Reserve Bank of St. Louis
Part of Series: Working Papers
Publication Date: 2022-08-03
Number: 2022-031
Note: Publisher DOI: https://doi.org/10.20955/r.105.66-73