Disclosure, Venture Capital and Entrepreneurial Spawning
48 Pages Posted: 17 Mar 2010 Last revised: 5 Jan 2011
Date Written: May 5, 2010
Venture capital funds (as well as private equity funds and hedge funds) in many countries around the world are facing increasing regulatory scrutiny since the 2007 financial crisis, particularly in respect of calls for increased disclosure requirements. In this paper, we examine whether more stringent securities regulation and disclosure requirements helps or hinders the supply and performance of venture capital. Further, we examine international differences in the impact of venture capital on new business creation. Based on data from 34 countries over the years 1998-2007, we find more stringent regulation and disclosure has a positive impact on the supply and performance of venture capital around the world, and a positive impact on entrepreneurial spawning induced by venture capital.
Keywords: Venture capital, Spawning, Disclosure, Securities regulation
JEL Classification: E6, G2, K2
Suggested Citation: Suggested Citation