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Journal of Banking & Finance Vol. 172 2025

Right-to-work laws and venture capital investment

Helena Sarkodie1; Kwabena Boasiako2; Michael O’Connor Keefe1; Justin Nguyen3; Bernard Tawiah4,5

1 Victoria University of Wellington · 2 Manchester Metropolitan University · 3 Edith Cowan University · 4 Southern Utah University · 5 Leavitt Partners (United States)

open access

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. • Right to work laws encourage Venture Capital Investment. • Uses state-level data from the United States covering the period 1980 to 2020. • Employs a difference-in-differences strategy. • The passage of right-to-work law increases Venture Capital investment by 80%.

DOI
10.1016/j.jbankfin.2025.107383
Volume
172
Pages
107383
Language
en
Sources
openalex crossref bibtex:phds-export.bib

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