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Public Policy For Venture Capital: An Integrated Framework


  • Iman Seoudi


This paper reviews the main theoretical and empirical literature on public policy that supports the development and growth of vibrant venture capital industries worldwide. The paper focuses on the content and results of public policy mechanisms adopted in various countries, their theoretical grounding and main empirical findings, with an eye to distilling the main patterns of success and failure. Five broad areas of public policy intervention that tackle both demand and supply sides of the venture capital industry are reviewed: (1) the development of an entrepreneurship and innovation ecosystem; (2) investment laws and regulations; (3) fiscal policy; (4) secondary stock market; and (5) government venture capital. The paper concludes with a public policy framework distilled from the literature. This work will help academics, practitioners and policy makers, especially those new to the field, to get a comprehensive yet concise map of the academic literature on the topic, which currently is much needed. It also helps readers in identifying the main research questions and empirical results to date

Suggested Citation

  • Iman Seoudi, 2015. "Public Policy For Venture Capital: An Integrated Framework," Global Journal of Business Research, The Institute for Business and Finance Research, vol. 9(4), pages 31-51.
  • Handle: RePEc:ibf:gjbres:v:9:y:2015:i:4:p:31-51

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    References listed on IDEAS

    1. Ravi Jagannathan & Tongshu Ma, 2003. "Risk Reduction in Large Portfolios: Why Imposing the Wrong Constraints Helps," Journal of Finance, American Finance Association, vol. 58(4), pages 1651-1684, August.
    2. Nadima El-Hassan & Paul Kofman, 2003. "Tracking Error and Active Portfolio Management," Australian Journal of Management, Australian School of Business, vol. 28(2), pages 183-207, September.
    3. Cesari, Riccardo & Cremonini, David, 2003. "Benchmarking, portfolio insurance and technical analysis: a Monte Carlo comparison of dynamic strategies of asset allocation," Journal of Economic Dynamics and Control, Elsevier, vol. 27(6), pages 987-1011, April.
    4. Gaivoronski, Alexei A. & Krylov, Sergiy & van der Wijst, Nico, 2005. "Optimal portfolio selection and dynamic benchmark tracking," European Journal of Operational Research, Elsevier, vol. 163(1), pages 115-131, May.
    5. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    6. Rudolf, Markus & Wolter, Hans-Jurgen & Zimmermann, Heinz, 1999. "A linear model for tracking error minimization," Journal of Banking & Finance, Elsevier, vol. 23(1), pages 85-103, January.
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    More about this item


    Venture Capital; Public Policy; Entrepreneurship Policy; Entrepreneurial Finance; Financing Innovation;

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy


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