Publications
Publications
- 2023
- HBS Working Paper Series
Fencing Off Silicon Valley: Cross-Border Venture Capital and Technology Spillovers
By: Ufuk Akcigit, Sina T. Ates, Josh Lerner, Richard Townsend and Yulia Zhestkova
Abstract
The treatment of foreign investors is a contentious topic in U.S. entrepreneurship policy. We
model a setting where foreign corporate investments in Silicon Valley may allow U.S. entrepreneurs
to pursue technologies that they could not otherwise, but may also lead to knowledge
spillovers. We show that despite the benefits from such inbound investments for U.S. firms, it
may be optimal for the U.S. government to raise their costs to deter these investments. Using as
comprehensive as possible a sample of investments by foreign corporate investors in U.S. startups,
we find evidence consistent with the presence of knowledge spillovers to foreign investors.
Keywords
Innovation; Corporate Venture Capital; Knowledge Spillovers; Innovation and Invention; Foreign Direct Investment; Venture Capital; Entrepreneurship; Policy; United States
Citation
Akcigit, Ufuk, Sina T. Ates, Josh Lerner, Richard Townsend, and Yulia Zhestkova. "Fencing Off Silicon Valley: Cross-Border Venture Capital and Technology Spillovers." Harvard Business School Working Paper, No. 21-043, September 2020. (Revised September 2023. Conditionally Accepted, Journal of Monetary Economics.)