Public Economics Gone Wild: Lessons from Venture Capital
Douglas J. Cumming
York University - Schulich School of Business
May 6, 2013
A recent article in the Journal of Public Economics has asserted, among other things, that government venture capital funds in Europe have crowded out private venture capital. In this research note, I explain that the findings in that paper are based on empirical measures that are completely flawed. Moreover, I show with data spanning 13 countries and the years 1989-2011 that government venture capital funds in Europe have not crowded out private venture capital investment.
Number of Pages in PDF File: 16
Keywords: Venture capital, Public Policy, Government sponsorship, Tax, Crowding out
JEL Classification: G24, G28, G32, G38, K22
Date posted: December 29, 2012 ; Last revised: May 8, 2013
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