Public Economics Gone Wild: Lessons from Venture Capital

Cumming, Douglas J.

doi:10.2139/ssrn.2194452

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Public Economics Gone Wild: Lessons from Venture Capital

16 Pages Posted: 29 Dec 2012 Last revised: 8 May 2013

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University; Birmingham Business School; European Corporate Governance Institute (ECGI)

There are 2 versions of this paper

Date Written: May 6, 2013

Abstract

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.

Keywords: Venture capital, Public Policy, Government sponsorship, Tax, Crowding out

JEL Classification: G24, G28, G32, G38, K22

Suggested Citation: Suggested Citation

Cumming, Douglas J., Public Economics Gone Wild: Lessons from Venture Capital (May 6, 2013). Available at SSRN: https://ssrn.com/abstract=2194452 or http://dx.doi.org/10.2139/ssrn.2194452