Startup ecosystems and venture capital (VC) are increasingly recognized as critical drivers of sustainable economic growth, yet their macroeconomic effects remain insufficiently quantified. This study develops and validates a composite VC activity index (V Index) as a proxy for startup ecosystem maturity across 23 European countries from 2013 to 2024. The V Index is derived via Principal Component Analysis applied to four VC metrics: VC investment amount, VC divestment amount, number of investment rounds, and number of divestment rounds. Using panel data regression methods—including fixed and random effects specifications, the study considers associations between the V Index and four macroeconomic outcomes: labor productivity, capital productivity, high-technology exports, and business R&D expenditure. The results show that a more mature startup ecosystem is associated with immediate gains in labor productivity, while capital productivity, high-technology exports, and innovation expenditure show positive associations with a one- to two-year lag, reflecting time-to-build and knowledge diffusion dynamics. These findings provide empirical support for VC-driven startup ecosystems as contributors to sustainable, knowledge-based economic growth and present actionable evidence for decision-makers designing startup support programs aligned with sustainable growth objectives.
Kleponė et al. (Wed,) studied this question.