Working Paper: NBER ID: w25248
Authors: Jian Jia; Ginger Zhe Jin; Liad Wagman
Abstract: The General Data Protection Regulation (GDPR) came into effect in the European Union in May 2018. We study its short-run impact on investment in new and emerging technology firms. Our findings indicate negative post-GDPR effects on EU ventures, relative to their US counterparts. The negative effects manifest in the overall dollar amounts raised across funding deals, the number of deals, and the dollar amount raised per individual deal.
Keywords: GDPR; technology ventures; investment; data protection; venture capital
JEL Codes: D43; D8; L13; L15; L5
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GDPR implementation (Y10) | reduction in overall dollar amounts raised by EU ventures (O52) |
| GDPR implementation (Y10) | reduction in the number of weekly venture deals (G24) |
| GDPR implementation (Y10) | decrease in the amount raised per individual deal (G24) |
| GDPR implementation (Y10) | negative impact on investment in nascent ventures (G24) |
| GDPR implementation (Y10) | potential job losses due to reduced investment (F66) |