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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.

Suggested Citation

  • Christian Keuschnigg, 2003. "Public Policy and Venture Capital Backed Innovation," CESifo Working Paper Series 1066, CESifo.
    • Handle: RePEc:ces:ceswps:_1066
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    Full references (including those not matched with items on IDEAS)

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    Keywords

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