The reallocation effects of COVID-19: Evidence from venture capital investments around the world.
Andrea Bellucci, Alexander Borisov, Gianluca Gucciardi, Alberto Zazzaro
Author Information
Andrea Bellucci: Department of Economics, Universit�� degli Studi dell'Insubria, European Commission, Joint Research Centre (JRC), and MoFiR. Address: Via Monte Generoso 71, 21100 Varese (VA), Italy.
Alexander Borisov: Lindner College of Business, University of Cincinnati and MoFiR. Address: 2906 Woodside Drive, Cincinnati, OH 45221, USA.
Gianluca Gucciardi: European Commission, Joint Research Centre (JRC). Address: Via E. Fermi, 2749, 21027 Ispra VA, Italy.
Alberto Zazzaro: Department of Economics and Statistics, University of Naples Federico II, CSEF, and MoFiR. Address: Via Cintia, 21, 80126, Naples, Italy.
We examine possible reallocation effects generated by the COVID-19 outbreak by analyzing the patterns of venture capital (VC) investments around the globe. Using transaction-level data and exploiting the staggered nature of the spread of the virus, we document a shift in VC portfolios towards firms developing technologies relevant to an environment of social distancing and health pandemic concerns. A difference-in-differences analysis estimates significant increases in invested amount and number of deals in such areas. We show heterogenous effects related to the experience of VC investors, as well as their size and organizational form.
