arbiter
JournalsPricingAccount

The Effect of Policy Uncertainty on VC Investments Around the World

Lubomir P. Litov et al.

Journal of Law, Finance, and Accounting2024https://doi.org/10.1561/108.00000065article
AJG 2
Weight
0.30

What the paper says

This study documents a significant negative relationship between policy uncertainty and venture capital (VC) investment in startups across emerging venture capital markets (i.e., outside the United States). The adverse effect of policy uncertainty is exacerbated for younger and early-stage startups. By contrast, the effect is attenuated for startups that have headquarters in cities with a high concentration of global VC investment, in countries with more developed stock markets, or if the VC is led by a bank or a corporate entity. Using close national elections to alleviate endogeneity concerns, we find that the baseline results continue to hold. Furthermore, this study provides evidence that uncertainty increases the number of financing rounds, decreases the fraction of investment amount during the first round, and reduces the likelihood of successful exit through acquisition. Finally, we also find that policy uncertainty reduces the amount of cross-border VC investment.

1 citation

Open paper page →

Cite this paper

https://doi.org/https://doi.org/10.1561/108.00000065

Or copy a formatted citation

@article{lubomir2024,
  title        = {{The Effect of Policy Uncertainty on VC Investments Around the World}},
  author       = {Lubomir P. Litov et al.},
  journal      = {Journal of Law, Finance, and Accounting},
  year         = {2024},
  doi          = {https://doi.org/https://doi.org/10.1561/108.00000065},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

The Effect of Policy Uncertainty on VC Investments Around the World

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.30

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.