Convergence in Venture Capital Investments across U.S. Regions: An Extension of the Ballinger et al. (2016) Study

In a recent study published in this journal, Ballinger et al. (2016) employ a battery of panel unit root tests to nd venture capital investment shares across U.S. regions are stationary (i.e., they nd evidence of stochastic convergence). We endeavor to extend their analysis by exploring the possibility of distinct convergence clubs through the use of the Phillips and Sul (2007, 2009) approach. The Phillips-Sul club convergence results reveal that venture capital investments exhibit three distinct convergence clubs along with one region that portrays non-converging behavior.