Publication Type
Journal Article
Version
publishedVersion
Publication Date
12-2025
Abstract
Motivated by the substantial growth and upfront investments of venture capital (VC)-backed firms observed in administrative US Census data, this study develops a life-cycle firm dynamics model. In the model, startups choose the source of financing from VC, angel investors, or banks, depending on their growth potential, and invest in innovation. The calibrated model explains the life-cycle dynamics of firms with different sources of financing and suggests that venture capitalists' managerial advice accounts for around 22% of the growth in VC-backed firms. A counterfactual economy without VC financing would experience an aggregate consumption loss of around 0.46%.
Discipline
Growth and Development | International Economics
Research Areas
Applied Microeconomics
Publication
International Economic Review
First Page
1
Last Page
20
ISSN
0020-6598
Identifier
10.1111/iere.70048
Publisher
Wiley
Citation
ANDO, Yoshiki.
Dynamics of high-growth young firms and the role of venture capitalists. (2025). International Economic Review. 1-20.
Available at: https://ink.library.smu.edu.sg/soe_research/2837
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1111/iere.70048