Article | Industrial and Corporate Change | February 2013

Institutions and Venture Capital

by Josh Lerner and Joacim Tag


We survey the literature on venture capital and institutions and present a case study comparing the development of the venture capital market in the United States and Sweden. Our literature survey underscores that the legal environment, financial market development, the tax system, labor market regulations, and public spending on research and development correlate with venture capital activities across countries. Our case study suggests these institutional differences led to the later development of an active venture capital market in Sweden compared with the United States. In particular, a later development of financial markets and a heavier tax burden for entrepreneurs have played a key role.

Keywords: Venture Capital; Organizations; Taxation; Entrepreneurship; Financial Markets; United States; Sweden;


Lerner, Josh, and Joacim Tag. "Institutions and Venture Capital." Industrial and Corporate Change 22, no. 1 (February 2013): 153–182.