Engineering a Venture Capital Market and the Effects of Government Control on Private Ordering: Lessons from the Taiwan Experience
40 Pages Posted: 7 Nov 2005
Many nations seek to engineer venture capital markets because of the contributions venture capitalists make to the growth of advanced-technology industries and innovation. But what is the proper formula for engineering a venture capital market? Professor Ronald Gilson has proposed that a government attempting to engineer a venture capital market should create capital and incentivized financial intermediaries, but then take a passive role in the investment decisions of the venture capital funds. However, as governments engineer venture capital markets, they may naturally attempt to influence or control the investment decisions of venture capitalists.
This article examines the Taiwan experience and explores how government involvement in an engineered venture capital market affects private ordering.
Keywords: Taiwan, Corporate Law, Venture Capital, Innovation, Technology, Asia
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