Venture Capital, the Public Sector, and the High-Technology Industry

International Journal of Innovation and Technology Management, Vol. 5, No. 1, pp. 105-122, 2008

20 Pages Posted: 13 Aug 2008

See all articles by Avi Messica

Avi Messica

The College of Management

Tamir Agmon

Tel Aviv University, Faculty of Management

Multiple version iconThere are 2 versions of this paper

Date Written: May 13, 2007

Abstract

We studied the optimal funding of the public sector for the Hi-Tech industry in the presence of short-term, cyclical, venture capital (VC) funding by constructing a decision-making model that results in the optimal governmental support and a model that accounts for the dynamics of the VC industry. We found that the VC industry is highly correlated with the NASDAQ stock index and that the optimal public policy for funding the Hi-Tech sector should be anti-cyclical, dynamic, and conditioned on the VC investments. The models and their validation are discussed as well as the practical implications for policy and decision makers.

Keywords: Public sector, Government, Venture Capital, Investment, High Technology, Hi-Tech

JEL Classification: O10, O30, O31, O32, O33, O38

Suggested Citation

Messica, Avi and Agmon, Tamir, Venture Capital, the Public Sector, and the High-Technology Industry (May 13, 2007). International Journal of Innovation and Technology Management, Vol. 5, No. 1, pp. 105-122, 2008, Available at SSRN: https://ssrn.com/abstract=1210117

Avi Messica (Contact Author)

The College of Management ( email )

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Tamir Agmon

Tel Aviv University, Faculty of Management

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Tel Aviv
Israel
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