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Review of Finance Vol. 19 No. 2 2015

The Effects of Government-Sponsored Venture Capital: International Evidence

James A. Brander; Qianqian Du; Thomas Hellmann

1 Sauder School of Business, University of British Columbia, 2Shanghai Advanced Institute of Finance (SAIF), Shanghai Jiao Tong University, and 3Sauder School of Business, University of British Columbia

Abstract

This article examines enterprises funded by government-sponsored venture capitalists (GVCs). We find that enterprises funded by both GVCs and private venture capitalists (PVCs) obtain more investment than enterprises funded purely by PVCs, and much more than those funded purely by GVCs. Also, markets with more GVC funding have more VC funding per enterprise and more VC-funded enterprises, suggesting that GVC finance largely augments rather than displaces PVC finance. There is also a positive association between mixed GVC/PVC funding and successful exits, as measured by initial public offerings (IPOs) and acquisitions, attributable largely to the additional investment.

DOI
10.1093/rof/rfu009
Volume
19
Issue
2
Pages
571-618
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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