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Review Essay: Regional Venture Capital Policy: UK and Germany Compared1

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  • Diana Heger
  • Andreas Fier
  • Gordon Murray

Abstract

The government has become an important ‘player’ in the provision of early-stage, venture capital finance to nascent and growing businesses. Public funds have been invested by government agencies both directly to client firms and indirectly via investment in the funds of existing venture capital organisations. With the demise of technology stocks post 2000, governments have felt the need to become more involved in the provision of early-stage finance as private investors have increasingly withdrawn from equity markets that have produced unattractive longer-term returns to technology investments. Europe is in the forefront of designing programmes by which the state may intervene to address allegedly supply-side failures in the market for risk capital. Martin et al. (2003) analyse the regional Venture Capital policies of the UK and Germany reviewing the interactions between central governments and regional authorities. They conclude that there are significant regional venture capital gaps in both countries particularly at the earliest stages of investment. In this review, the major findings of their scientific study, key policy implications and future research implications are discussed.

Suggested Citation

  • Diana Heger & Andreas Fier & Gordon Murray, 2005. "Review Essay: Regional Venture Capital Policy: UK and Germany Compared1," Venture Capital, Taylor & Francis Journals, vol. 7(4), pages 373-383, April.
    • Handle: RePEc:taf:veecee:v:7:y:2005:i:4:p:373-383
    DOI: 10.1080/13691060500138756
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    References listed on IDEAS

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    1. Engel, Dirk & Keilbach, Max, 2007. "Firm-level implications of early stage venture capital investment -- An empirical investigation," Journal of Empirical Finance, Elsevier, vol. 14(2), pages 150-167, March.
    2. Almus, Matthias & Engel, Dirk & Nerlinger, Eric A., 1999. "Wachstumsdeterminanten junger Unternehmen in den alten und neuen Bundesländern: Ein Vergleich zwischen innovativen und nicht-innovativen Unternehmen," ZEW Discussion Papers 99-09, ZEW - Leibniz Centre for European Economic Research.
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    1. 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.
    2. Mark R. Ayoub & Sandra Gottschalk & Bettina Müller, 2017. "Impact of public seed-funding on academic spin-offs," The Journal of Technology Transfer, Springer, vol. 42(5), pages 1100-1124, October.

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