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Public Policy and Venture Capital Backed Innovation

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  • Christian Keuschnigg

Abstract

This paper discusses the role of public policy towards the venture capital industry. The model emphasizes four margins: supply of entrepreneurs due to career choice, entry of venture capital funds and search for investment opportunities, entrepreneurial effort and venture capital advice during the start-up period, and introduction of new goods by successful start-ups. The paper considers short- and long-run comparative static and welfare effects of policy reform with regard to capital gains taxation, innovation subsidies, public R&D spending and other policy initiatives.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2003/wp-cesifo-2003-10/cesifo1_wp1066.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1066.

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Date of creation: 2003
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Handle: RePEc:ces:ceswps:_1066

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Keywords: innovation; venture capital; double moral hazard; public policy;

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References

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Citations

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Cited by:
  1. Cumming, D. & Johan, S.A., 2005. "Advice and monitoring in venture finance," Discussion Paper, Tilburg University, Tilburg Law and Economic Center 2005-003, Tilburg University, Tilburg Law and Economic Center.
  2. Sofia Johan & Dorra Najar, 2011. "The Role of Law, Corruption and Culture in Investment Fund Manager Fees," Post-Print, HAL halshs-00639925, HAL.
  3. Cumming, Douglas & Johan, Sofia, 2007. "Regulatory harmonization and the development of private equity markets," Journal of Banking & Finance, Elsevier, Elsevier, vol. 31(10), pages 3218-3250, October.
  4. Cumming, D. & Johan, S.A., 2005. "Is it the law or the lawyers? Investment fund covenants," Discussion Paper, Tilburg University, Tilburg Law and Economic Center 2005-005, Tilburg University, Tilburg Law and Economic Center.
  5. Andy Cosh & Douglas Cumming & Alan Hughes, 2005. "Outside Entrepreneurial Capital," ESRC Centre for Business Research - Working Papers, ESRC Centre for Business Research wp301, ESRC Centre for Business Research.
  6. Cumming, D. & Johan, S.A., 2005. "Provincial preferences in private equity," Discussion Paper, Tilburg University, Tilburg Law and Economic Center 2005-004, Tilburg University, Tilburg Law and Economic Center.
  7. Cumming, Douglas & Fleming, Grant & Schwienbacher, Armin, 2006. "Legality and venture capital exits," Journal of Corporate Finance, Elsevier, Elsevier, vol. 12(2), pages 214-245, January.
  8. Cumming, Douglas & Dai, Na, 2010. "Local bias in venture capital investments," Journal of Empirical Finance, Elsevier, Elsevier, vol. 17(3), pages 362-380, June.

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