VC/PE Funds, Government Grants and Innovation in Newly Public Firms

65 Pages Posted: 5 Feb 2013 Last revised: 12 Jun 2015

Mark Humphery-Jenner

UNSW Business School; Financial Research Network (FIRN)

Jo-Ann Suchard

UNSW Australia Business School, School of Banking and Finance; Financial Research Network (FIRN)

Date Written: February 5, 2013

Abstract

We highlight the circular relationship between venture capital and private equity (VC/PE) investment, R&D grants, and innovation. We focus on Australia, which has low levels of innovation and VC/PE activity, but has a comparable legal environment to other developed, but high innovation markets. We show that government grants encourage VC/PE investment and that VC funds and government grants increase both innovation inputs (R&D) and outputs (patents and citations) in newly public firms. Buyout funds only increase outputs, and large funds and domestic funds are best able to induce innovation outputs. This highlights the importance of both grant schemes and VC/PE investment to innovation.

Keywords: innovation, R&D, patents, venture capital, private equity, grants, VC, PE

JEL Classification: G24, G31, O31, O32

Suggested Citation

Humphery-Jenner, Mark and Suchard, Jo-Ann, VC/PE Funds, Government Grants and Innovation in Newly Public Firms (February 5, 2013). UNSW Australian School of Business Research Paper No. 2013 BFIN 01. Available at SSRN: https://ssrn.com/abstract=2211919 or http://dx.doi.org/10.2139/ssrn.2211919

Mark Humphery-Jenner (Contact Author)

UNSW Business School ( email )

Sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Jo-Ann Suchard

UNSW Australia Business School, School of Banking and Finance ( email )

Sydney, NSW 2052
Australia
61 2 9385 5876 (Phone)
61 2 9385 6347 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Paper statistics

Downloads
45
Abstract Views
301