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Public policy, entrepreneurship, and venture capital in the United States

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  • Cumming, Douglas
  • Li, Dan

Abstract

This paper empirically examines business starts, deaths, venture capital and patents in relation to U.S. public policy. The most consistent evidence in the data shows that lower levels of labor frictions and higher levels of SBIR awards are associated with more business starts and higher levels of venture capital per population. Counter to expectations, the data indicate a positive impact from the homestead exemption only among the bottom quartile homestead exemption states, and otherwise a negative impact. We analyze a variety of other policy instruments and compare the effects of policy in regular times with the financial crisis of 2008–2010.

Suggested Citation

  • Cumming, Douglas & Li, Dan, 2013. "Public policy, entrepreneurship, and venture capital in the United States," Journal of Corporate Finance, Elsevier, vol. 23(C), pages 345-367.
  • Handle: RePEc:eee:corfin:v:23:y:2013:i:c:p:345-367 DOI: 10.1016/j.jcorpfin.2013.09.005
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    Citations

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    Cited by:

    1. Douglas Cumming & Sofia Johan & Jeffrey G. MacIntosh, 2017. "A drop in an empty pond: Canadian public policy towards venture capital," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(1), pages 103-117, March.
    2. repec:wsi:ijitmx:v:14:y:2017:i:06:n:s0219877017500316 is not listed on IDEAS
    3. Alperovych, Yan & Hübner, Georges & Lobet, Fabrice, 2015. "How does governmental versus private venture capital backing affect a firm's efficiency? Evidence from Belgium," Journal of Business Venturing, Elsevier, vol. 30(4), pages 508-525.
    4. Joshua C. Hall & Dean Stansel & Danko Tarabar, 2015. "Economic Freedom Studies at the State Level: A Survey," Working Papers 15-07, Department of Economics, West Virginia University.
    5. Cole, Rebel & Cumming, Douglas & Li, Dan, 2016. "Do banks or VCs spur small firm growth?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 41(C), pages 60-72.
    6. Cumming, Douglas & Zhang, Yelin, 2016. "Alternative investments in emerging markets: A review and new trends," Emerging Markets Review, Elsevier, vol. 29(C), pages 1-23.
    7. Urbano, David & Aparicio, Sebastian, 2016. "Entrepreneurship capital types and economic growth: International evidence," Technological Forecasting and Social Change, Elsevier, pages 34-44.
    8. Douglas Cumming & Sofia Johan, 2016. "Venture’s economic impact in Australia," The Journal of Technology Transfer, Springer, vol. 41(1), pages 25-59, February.
    9. repec:gam:jeners:v:10:y:2017:i:12:p:2131-:d:122976 is not listed on IDEAS
    10. Joern H. Block & Douglas J. Cumming & Silvio Vismara, 2017. "International perspectives on venture capital and bank finance for entrepreneurial firms," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(1), pages 3-22, March.
    11. Belkhir, Mohamed & Ben-Nasr, Hamdi & Boubaker, Sabri, 2016. "Labor protection and corporate Debt maturity: International evidence," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 134-149.
    12. repec:kap:jtecht:v:42:y:2017:i:5:d:10.1007_s10961-016-9476-5 is not listed on IDEAS

    More about this item

    Keywords

    Venture capital; Entrepreneurship; Public policy; Tax; Labor law; Bankruptcy;

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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