Work

Who creates jobs? Venture capital, research grants, and regional employment in the U.S.

Year: 2018

Type: article

Abstract: We build on the exploratory and exploitative learning literature that suggests that venture capital and governmental research grants may impact regional employment in a different manner. Using a regional employment dataset in the U.S. medical device sector, our analysis reveals that research grants contribute to create a greater level of regional employment compared with venture capital funding. Furthermore, the positive effects of both funding sources are more salient when intellectual capital is abundant in the region. More specifically, the interaction effect of research grants and intellectual capital is gradually increased in the long term and eventually becomes greater than that of venture capital and intellectual capital, which is relatively constant. These findings highlight the heterogeneous motivations and consequences of two funding sources that should be considered in the future resource allocation policy accordingly.

Source: Industry and Innovation

DOI: 10.1080/13662716.2018.1529555

Authors: Hyunsung D. Kang, Elazer Edelman, David N. Ku

Institutions: Berry College, Massachusetts Institute of Technology, Georgia Institute of Technology

Language: English

Topic: Private Equity and Venture Capital

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

Funders: Harvard University, National Institute of General Medical Sciences