Does economic policy uncertainty affect venture capital investments for OECD countries?

Abstract

Economic policy uncertainty (EPU) has significant effects on the real economy. Therefore, this study aims to investigate the effects of economic policy uncertainty on venture capital, a special financing form. In this study, the effects of economic uncertainty on venture capital for 14 OECD countries are investigated between 2007 and 2020 years. The results show that the increase in economic uncertainty in the long term increases venture capital investments in developed countries. The contributions of the study are demonstrating how venture capital reacts to economic policy uncertainty and using up-to-date methods that allow soft transitions to studying long-term relations between series.