The Macroeconomic Determinants of Venture Capital Investments

Sammanfattning: In this paper, we aim to contribute to the work around different macroeconomic effects that influence the supply and demand of venture capital investments. By introducing a new variable explaining the recent upturn in companies with a more technological business model, we hope to shed some light upon venture capital investments as part of business trends. From panel data consisting of 20 European countries between 2007-2015, we base our empirical model on factors already enumerated in the literature on venture capital. We introduce the new variable online purchasing behaviour as a proxy for the technological development that has influenced both new and established companies in recent years. In our random, between and within effects regressions, we find evidence supporting corporate tax rate, private equity funds raised, GDP growth, IPOs and labor market rigidities as significant determinants for venture capital investments, something that is in line with previous research. Furthermore, by creating a subpanel to control for the time-period between 2012-2015, we find significant results for the technological variable as a positive determinant for venture capital investments.