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Formal and Informal Equity Funding in Chile

Author

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  • José Ernesto Amorós
  • Miguel Atienza
  • Gianni Romaní

Abstract

This paper explores the state of formal and informal equity sources currently available for financing entrepreneurial activity in Chile. By integrating theoretical perspectives regarding formal and informal equity funding and information gathered from the Global Entrepreneurship Monitor (GEM) surveys, the paper argues that despite the favorable environment existing in Chile for equity investment, these markets are still incipient and strongly dependent on public policies. In this respect it is proposed that public intervention to address equity gaps in Chile should also adopt a demand-side perspective, aimed at improving the quality of investment opportunities, and should incorporate a geographical dimension, considering the particularities and financial needs of non-metropolitan regions.

Suggested Citation

  • José Ernesto Amorós & Miguel Atienza & Gianni Romaní, 2008. "Formal and Informal Equity Funding in Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 35(2 Year 20), pages 179-194, December.
    • Handle: RePEc:udc:esteco:v:35:y:2008:i:2:p:179-194
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    References listed on IDEAS

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    4. Rodrigo Cifuentes & Jorge Desormeaux & Claudio González, 2002. "Capital markets in Chile: from financial repression to financial deepening," BIS Papers chapters, in: Bank for International Settlements (ed.), The development of bond markets in emerging economies, volume 11, pages 86-102, Bank for International Settlements.
    5. G. Romaní & M. Atienza & J. E. Amorós, 2008. "Financing entrepreneurial activity in Chile: scale and scope of public support programs," Venture Capital, Taylor & Francis Journals, vol. 11(1), pages 55-70, June.
    6. Ron Martin & Peter Sunley, 2002. "Taking risks in regions: the geographical anatomy of Europe's emerging venture capital market," Journal of Economic Geography, Oxford University Press, vol. 2(2), pages 121-150, April.
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    8. Rodrigo Cifuentes & Jorge Desormeaux & Claudio González, 2002. "Capital Markets in Chile: From Financial Repression to Financial Deepening," Economic Policy Papers Central Bank of Chile 04, Central Bank of Chile.
    9. William Bygrave & Michael Hay & Emily Ng & Paul Reynolds, 2003. "Executive forum: A study of informal investing in 29 nations composing the Global Entrepreneurship Monitor," Venture Capital, Taylor & Francis Journals, vol. 5(2), pages 101-116, April.
    10. Prowse, Stephen, 1998. "Angel investors and the market for angel investments," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 785-792, August.
    11. Michael Fritsch & Dirk Schilder, 2008. "Does Venture Capital Investment Really Require Spatial Proximity? An Empirical Investigation," Environment and Planning A, , vol. 40(9), pages 2114-2131, September.
    12. László Szerb & Gábor Rappai & Zsolt Makra & Siri Terjesen, 2007. "Informal Investment in Transition Economies: Individual Characteristics and Clusters," Small Business Economics, Springer, vol. 28(2), pages 257-271, March.
    13. Ron Martin & Christian Berndt & Britta Klagge & Peter Sunley, 2005. "Spatial Proximity Effects and Regional Equity Gaps in the Venture Capital Market: Evidence from Germany and the United Kingdom," Environment and Planning A, , vol. 37(7), pages 1207-1231, July.
    14. Jane S. Pollard, 2003. "Small firm finance and economic geography," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 429-452, October.
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    Cited by:

    1. Zoltan J. Acs & José Ernesto Amorós, 2008. "Introduction: The startup process," Estudios de Economia, University of Chile, Department of Economics, vol. 35(2 Year 20), pages 121-132, December.
    2. Rehman, Naqeeb Ur, 2016. "Innovation Performance of Chilean SMEs: A Bivariate Probit Analysis," MPRA Paper 68827, University Library of Munich, Germany.
    3. Claudia Álvarez & David Urbano & José Amorós, 2014. "GEM research: achievements and challenges," Small Business Economics, Springer, vol. 42(3), pages 445-465, March.

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    More about this item

    Keywords

    Entrepreneurship; Venture capital; Business angels; Informal investment; equity gaps;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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