The Silicon Valley Syndrome

How does expansion in the high-tech sector influence the broader economy of a region? We demonstrate that an infusion of venture capital in a region leads to: (i) declines in the number of establishments and in employment in non–high-tech industries in the tradable sector; (ii) increases in entry an...

Full description

Saved in:
Bibliographic Details
Published inEntrepreneurship theory and practice Vol. 47; no. 2; pp. 344 - 368
Main Authors Kwon, Doris, Sorenson, Olav
Format Journal Article
LanguageEnglish
Published Los Angeles, CA SAGE Publications 01.03.2023
SAGE PUBLICATIONS, INC
Subjects
Employment
Income inequality
Venture capital
research methods
entrepreneurial finance
inequality
venture capital
geography
Online AccessGet full text

Cover

More Information
Summary:How does expansion in the high-tech sector influence the broader economy of a region? We demonstrate that an infusion of venture capital in a region leads to: (i) declines in the number of establishments and in employment in non–high-tech industries in the tradable sector; (ii) increases in entry and in employment in the non-tradable sector; and (iii) a rise in income inequality in the non-tradable sector. Expansion in the high-tech sector therefore leads to a less diverse tradable sector and to increasing inequality in the region.
ISSN:1042-2587
1540-6520
DOI:10.1177/10422587211050892