The Determinants of Venture Capital Funding in G7 Countries

Abstract

This paper investigates the main determinants of venture capital funding across G7 countries over 2007- 2017. We extend the equilibrium model from Jeng and Wells (2000) and evaluate four types of factors affecting supply and demand of venture capital including macroeconomic condition, financial market, entrepreneurship environment and technological opportunities. We collect and Compile data from OECD, World Bank, IMF as well as national database, to estimate panel data model. We find that market capital, market capital return, interest rate, unemployment and ease of starting a business have the main impact on venture capital.