Question

What impact does a country's level of IPO activity have on its venture capital funding? How does this compare to the impact of labor market rigitidies?

IN 100 WORDS OR LESS.

Answer 1

IPO or Initial Public Offering is the first time a share of a company is offered to the investors. There is a strong relationship between the IPO activity of a country and venture capital funding. The venture capital funding companies look for countries where the IPO activity is more. The reason is that they want to be able to access international resources. So a country with good IPOs will also be a good market for venture capitalists.

Though the market has become open to financial investments in other countries, the same is not true for labour market. Not all countries allow labour from other countries to work in their companies. Moreover, there are several rigidities that affect the job opportunities in other countries. Some of the venture capitalists however, provide such opportunities in the form of job offers. But this is still in the beginning stages only.