Right-to-work laws and venture capital investment

Sarkodie, Helena, Boasiako, Kwabena ORCID: https://orcid.org/0000-0002-9078-9396, Keefe, Michael O’Connor ORCID: https://orcid.org/0000-0002-3286-3906, Nguyen, Justin and Tawiah, Bernard (2025) Right-to-work laws and venture capital investment. Journal of Banking and Finance. 107383. ISSN 0378-4266

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Official URL: https://doi.org/10.1016/j.jbankfin.2025.107383

Abstract

Using state-level data from the United States covering the period 1980 to 2020, we explore the effect of right-to-work (RTW) laws on venture capital (VC) investment. Employing a difference-in-differences strategy, we find that the passage of right-to-work laws increases venture capital investment. The results are robust to omitted variable bias, reverse causality and unobservable local economic conditions. We find that the positive effect of RTW laws on VC investments remains significant in states that are highly unionized and technological.

Item Type:	Article (Article)
Peer-reviewed:	Yes
Date Deposited:	20 Jan 2025 11:46
Publisher:	Elsevier BV
Additional Information:	This is an open access article which first appeared in Journal of Banking and Finance
Divisions:	Faculties > Business and Law Faculties > Business and Law > Finance and Economics
Subject terms:	0102 Applied Mathematics, 1401 Economic Theory, 1502 Banking, Finance and Investment, Finance, 3502 Banking, finance and investment, 4901 Applied mathematics
Data Access Statement:	The authors do not have permission to share data.
URI:	https://e-space.mmu.ac.uk/id/eprint/638052
DOI:	https://doi.org/10.1016/j.jbankfin.2025.107383
ISSN	0378-4266

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