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Public Policy for Venture Capital Author info | Abstract | Publisher info | Download info | Related research | Statistics Christian Keuschnigg
Søren Bo Nielsen
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This paper proposes a simple partial equilibrium model to investigate the effects of government policy on venture capital backed investments. Giving up an alternative career, entrepreneurs focus their effort on a single, high risk venture each. Venture capitalists acquire an equity stake and offer a base salary as well. In addition to providing incentive compatible equity finance, they support the venture with managerial advice to raise survival chances. We analyze several policy measures addressed at venture capital activity: government spending on entrepreneurial training, subsidies to equipment investment, and output subsidies at the production stage. While these measures stimulate entrepreneurshiip, only cost-effective government services can improve welfare.
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Paper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number
01-06.
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Vesa Kanniainen & Christian Keuschnigg, 2000.
"The Optimal Portfolio of Start-Up Firms in Venture Capital Finance ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo Group Munich.
[Downloadable!]
Other versions:
Kanniainen, V. & Keuschnigg, C., 2000.
"The Optimal Portfolio of Start-up Firms in Venture Capital Finance ,"
University of Helsinki, Department of Economics
486, Department of Economics.
Kanniainen, Vesa & Keuschnigg, Christian, 2003.
"The optimal portfolio of start-up firms in venture capital finance ,"
Journal of Corporate Finance ,
Elsevier, vol. 9(5), pages 521-534, November.
[Downloadable!] (restricted) Cornelli, Francesca & Yosha, Oved, 1997.
"Stage Financing and the Role of Convertible Debt ,"
CEPR Discussion Papers
1735, C.E.P.R. Discussion Papers.
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Boadway, Robin & Marchand, Maurice & Pestieau, Pierre, 1991.
"Optimal linear income taxation in models with occupational choice ,"
Journal of Public Economics ,
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Repullo, R. & Suarez, J., 1998.
"Venture Capital Finance: a Security Design Approach ,"
Papers
9804, Centro de Estudios Monetarios Y Financieros-.
Other versions:
Repullo, Rafael & Suarez, Javier, 1999.
"Venture Capital Finance: A Security Design Approach ,"
CEPR Discussion Papers
2097, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Rafael Repullo & Javier Suarez, 2004.
"Venture Capital Finance: A Security Design Approach ,"
Review of Finance ,
Springer, vol. 8(1), pages 75-108.
[Downloadable!] Christian Keuschnigg & Soren Bo Nielsen, 2000.
"Tax Policy, Venture Capital, and Entrepreneurship ,"
Econometric Society World Congress 2000 Contributed Papers
1848, Econometric Society.
[Downloadable!]
Other versions:
Christian Keuschnigg & Søren Bo Nielsen, .
"Tax Policy, Venture Capital, and Entrepreneurship ,"
EPRU Working Paper Series
00-18, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
[Downloadable!] Keuschnigg, Christian & Nielsen, Soren Bo, 2000.
"Tax Policy, Venture Capital and Entrepreneurship ,"
CEPR Discussion Papers
2626, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Christian Keuschnigg & Soren Bo Nielsen, 2000.
"Tax Policy, Venture Capital, and Entrepreneurship ,"
NBER Working Papers
7976, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Keuschnigg, Christian & Nielsen, Soren Bo, 2003.
"Tax policy, venture capital, and entrepreneurship ,"
Journal of Public Economics ,
Elsevier, vol. 87(1), pages 175-203, January.
[Downloadable!] (restricted) Greenwald, Bruce C & Stiglitz, Joseph E, 1986.
"Externalities in Economies with Imperfect Information and Incomplete Markets ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 101(2), pages 229-64, May.
[Downloadable!] (restricted)
Storey, D. J. & Tether, B. S., 1998.
"Public policy measures to support new technology-based firms in the European Union ,"
Research Policy ,
Elsevier, vol. 26(9), pages 1037-1057, April.
[Downloadable!] (restricted)
Cornelli, F. & Yosha, O., 1997.
"Stage Financing and the Role of Convertible Debt ,"
Papers
23-97, Tel Aviv.
Hoff, Karla, 1994.
"The second theorem of the second best ,"
Journal of Public Economics ,
Elsevier, vol. 54(2), pages 223-242, June.
[Downloadable!] (restricted)
Sahlman, William A., 1990.
"The structure and governance of venture-capital organizations ,"
Journal of Financial Economics ,
Elsevier, vol. 27(2), pages 473-521, October.
[Downloadable!] (restricted)
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Christian Keuschnigg & Soren Bo Nielsen, 2002.
"Start-ups, Venture Capitalits, and the Capital Gains Tax ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo Group Munich.
[Downloadable!]
Other versions:
Keuschnigg, Christian & Nielsen, Soren Bo, 2002.
"Start-ups, Venture Capitalists and the Capital Gains Tax ,"
CEPR Discussion Papers
3263, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Christian Keuschnigg & Soren Bo Nielsen, 2002.
"Start-ups, Venture Capitalists, and the Capital Gains Tax ,"
University of St. Gallen Department of Economics working paper series 2002
2002-05, Department of Economics, University of St. Gallen.
[Downloadable!] Keuschnigg, Christian & Nielsen, Soren Bo, 2004.
"Start-ups, venture capitalists, and the capital gains tax ,"
Journal of Public Economics ,
Elsevier, vol. 88(5), pages 1011-1042, April.
[Downloadable!] (restricted) Clemens Fuest & Bernd Huber & Philipp Tillessen, 2003.
"Tax Policy and Entrepreneurship in the Presence of Asymmetric Information in Capital Markets ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo Group Munich.
[Downloadable!]
Douglas Cumming & Sofia Johan, 2006.
"Provincial preferences in private equity ,"
Financial Markets and Portfolio Management ,
Springer, vol. 20(4), pages 369-398, December.
[Downloadable!] (restricted)
Other versions: Cumming, D. & Johan, S., 2005.
"Is it the law or the lawyers? : Investment fund covernants across countries ,"
Discussion Paper
05, Tilburg University, Tilburg Law and Economic Center.
[Downloadable!]
Cumming, D. & Johan, S., 2005.
"Advice and monitoring in venture finance ,"
Discussion Paper
03, Tilburg University, Tilburg Law and Economic Center.
[Downloadable!]
Other versions: Andrea Schertler, 2002.
"Venture Capitalists Investment Incentives Under Public Equity Schemes ,"
Kiel Working Papers
1117, Kiel Institute for the World Economy.
[Downloadable!]
Douglas Cumming & Grant Fleming & Armin Schwienbacher, 2008.
"Financial intermediaries, ownership structure and the provision of venture capital to SMEs: evidence from Japan ,"
Small Business Economics ,
Springer, vol. 31(1), pages 59-92, June.
[Downloadable!] (restricted)
Douhan, Robin & Henrekson, Magnus, 2007.
"The Political Economy of Entrepreneurship: An Introduction ,"
Working Paper Series
688, Research Institute of Industrial Economics.
[Downloadable!]
Andrea Schertler, 2002.
"Comparative Advantages of Public Loan and Public Equity Schemes in Venture Capital Markets ,"
Kiel Working Papers
1118, Kiel Institute for the World Economy.
[Downloadable!]
Marco Da Rin & Giovanna Nicodano & Alessandro Sembenelli, 2004.
"Public Policy and the Creation of Active Venture Capital Markets ,"
Working Papers
270, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
[Downloadable!]
Other versions:
Marco Da Rin & Giovanna Nicodano & Alessandro Sembenelli, 2005.
"Public policy and the creation of active venture capital markets ,"
Working Paper Series
430, European Central Bank.
[Downloadable!] Da Rin, Marco & Nicodano, Giovanna & Sembenelli, Alessandro, 2006.
"Public policy and the creation of active venture capital markets ,"
Journal of Public Economics ,
Elsevier, vol. 90(8-9), pages 1699-1723, September.
[Downloadable!] (restricted) Douglas Cumming & Daniel Schmidt & Uwe Walz, 2004.
"Legality and Venture Governance Around the World ,"
CFS Working Paper Series
2004/17, Center for Financial Studies.
[Downloadable!]
Cumming, Douglas & Johan, Sofia, 2006.
"Regulatory harmonization and the development of private equity markets ,"
Discussion Paper
1, Tilburg University, Tilburg Law and Economic Center.
[Downloadable!]
Other versions:
Cumming, D. & Johan, S.A., 2006.
"Regulatory harmonization and the development of private equity markets ,"
Discussion Paper
2006-001, Tilburg University, Tilburg Law and Economic Center.
Cumming, Douglas & Johan, Sofia, 2007.
"Regulatory harmonization and the development of private equity markets ,"
Journal of Banking & Finance ,
Elsevier, vol. 31(10), pages 3218-3250, October.
[Downloadable!] (restricted) Gebhardt, Georg & Schmidt, Klaus M., 2001.
"Der Markt für Venture Capital: Anreizprobleme, Governance Strukturen und staatliche Interventionen ,"
Discussion Papers in Economics
31, University of Munich, Department of Economics.
[Downloadable!]
Other versions: John Armour & Douglas Cumming, 2004.
"The Legal Road To Replicating Silicon Valley ,"
ESRC Centre for Business Research - Working Papers
wp281, ESRC Centre for Business Research.
[Downloadable!]
Douglas J. Cumming & Jeffrey G. MacIntosh, 2003.
"Comparative Venture Capital Governance. Private versus Labour Sponsored Venture Capital Funds ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo Group Munich.
[Downloadable!]
Cécile Carpentier & Jean-Marc Suret, 2004.
"Bypassing the Financial Growth Cycle: Evidence from Capital Pool Companies ,"
CIRANO Working Papers
2004s-48, CIRANO.
[Downloadable!]
Cumming, Douglas & Johan, Sofia, 2006.
"Corporate social responsibility: domestic and international private equity institutional investment ,"
Discussion Paper
2, Tilburg University, Tilburg Law and Economic Center.
[Downloadable!]
Other versions: Christian Keuschnigg & Soren Bo Nielsen, 2003.
"Taxes and Venture Capital Support ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo Group Munich.
[Downloadable!]
Other versions: Jonathan Levie & Erkko Autio, 2008.
"A theoretical grounding and test of the GEM model ,"
Small Business Economics ,
Springer, vol. 31(3), pages 235-263, October.
[Downloadable!] (restricted)
Douglas Cumming, 2007.
"Financing Entrepreneurs Better Canadian Policy for Venture Capital ,"
C.D. Howe Institute Commentary ,
C.D. Howe Institute, issue 247, April.
[Downloadable!]
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