Macroeconomic shocks and venture capital in France

: a time-series analysis of investment dynamics and performance

Abstract

This dissertation examines the relationship between macroeconomic conditions and venture capital (VC) performance in France, focusing on how economic trends influence VC investments, deal flow, and fund outcomes over a 13-year period. Utilizing time-series regression analysis with data from France Invest and Eurostat, the study investigates the impact of interest rates, inflation, GDP growth, and policy changes on one of Europe's most mature VC ecosystems. The findings underscore the cyclical nature of VC investments, demonstrating that favorable macroeconomic conditions enhance VC performance through better internal rates of return and exit opportunities. Conversely, economic shocks and monetary policy shifts significantly affect VC profitability and deal strategies. The research reveals that during economic downturns, VC investors shift their focus towards safer, follow-on investments. This analysis not only supports existing literature on the sensitivity of VC investments to economic cycles but also provides practical insights for investors and policymakers on the importance of macroeconomic stability for fostering a thriving VC environment.

Date of Award	5 May 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Fátima Shuwaikh (Supervisor)