Geography of venture capital financing in Canada

Abstract

It is evident from the history of the world that clustering of economic activities (emergence of ancient civilisations, agricultural revolution, industrial revolutions, economic changes during the 2 world wars, and present day globalisation process) takes place in different parts of the world, which mainly depends on the favourable environmental factors. This is true even in the case of venture capital financing, globally as well as with in each region in a country too. Though the North American region is leading with 59 % of the amount raised and 35 % of the amount invested globally (GPE 2006), the share of Canada is only 0.91% and 0.51% respectively (GPE 2006). This clustering is even happening between the regions too, 41% of the investment is in Ontario, 39 % in Quebec, and 11 % in British Columbia, and remaining 8 % is towards other regions in 2005. This clustering has significance in shaping the pattern of regional economic development. This article tries to analyse this clustering of venture capital financing activity in Canada for a period of 13 years (1993-2005), and tries to find out the Venture Capital Development Index of different regions for the last three years (2003-2005).