Venture capital is assumed to play an important role for the commercialization of innovative ideas and the development of high-technology industries in a region. This paper deals with the regional distribution of venture capital and its explanation. Venture-backed firms are mostly located in urban districts. A main reason is the advantage of urban regions to generate a lot of new innovative ideas. Districts participated the BioRegio contest are attractive regions for venture capital inflows. On the contrary to predictions, the local availability of venture capital has no significant impact on the number of venture-backed firms in districts.
Engel, Dirk (2002), Welche Regionen profitieren von Venture Capital-Aktivitäten?, ZEW Discussion Paper No. 02-37, Mannheim. Download