Innovation in Newly Public Firms: The Influence of Government Grants, Venture Capital, and Private Equity

Posted: 22 Apr 2019

See all articles by George A. Shinkle

George A. Shinkle

University of New South Wales (UNSW)

Jo-Ann Suchard

Financial Research Network (FIRN); UNSW Business School

Date Written: November 29, 2018

Abstract

We investigate the influence of government grants, venture capital (VC), and private equity (PE) funding on innovation in newly public firms. We examine innovation inputs (R&D), innovation outputs (patents), and the quality thereof (patent citations). We contribute to understanding of the mechanisms between government grants and subsequent VC and PE funding and innovation. We find that grants encourage VC funding but not PE funding. Grants and VC/PE funding are generally complements regarding innovation except grants substitute for VC funding on innovation inputs. Furthermore, we observe that the firm-level heterogeneity of VC/PEs significantly influences innovation in portfolio companies.

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

JEL Classification: G24, G32, L53, O31, O38

Suggested Citation

Shinkle, George A. and Suchard, Jo-Ann and Suchard, Jo-Ann, Innovation in Newly Public Firms: The Influence of Government Grants, Venture Capital, and Private Equity (November 29, 2018). Australian Journal of Management, Vol. 44, No. 2, 2019, Available at SSRN: https://ssrn.com/abstract=3364319

George A. Shinkle (Contact Author)

University of New South Wales (UNSW) ( email )

Kensington
High St
Sydney, NSW 2052
Australia

Jo-Ann Suchard

Financial Research Network (FIRN)

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

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

UNSW Business School ( email )

high street
High St
sydney, NSW 2052
Australia

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