The European Business Council for Africa

This paper investigates the determinants of venture capital investments across 25 African countries over the period 2014-2019. In particular, it considers the significance of innovation and digitalization in Africa’s venture capital activity. The results show that digital infrastructure, high-technology exports, internet coverage, market size, minority investor protection, and government effectiveness are the main drivers of venture capital deals in Africa over the period examined. More generally, these findings highlight that digital infrastructure and connectivity, innovation and institutional frameworks all play an important role in shaping a favorable environment to attract venture capital funding.


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