Crowding Out Private Equity: Canadian Evidence

Cumming, Douglas J.; MacIntosh, Jeffrey G.

doi:10.2139/ssrn.323821

Cited by 71 publications

(91 citation statements)

References 52 publications

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“…Governmental programs Lelux and Surlemont (2003); Armour and Cumming (2016); Cumming and MacIntosh (2006) Da Rin et al…”

Section: Government Quality [13]mentioning

confidence: 99%

“…Interest rates Cumming and MacIntosh (2006) Bonini and Alkan (2012) Romain and van Pottelsberghe (2004)…”

Section: Type Of Institutionmentioning

confidence: 99%

“…Lerner argues that government spending can easily result in an avenue of false and unrealistic expectations, something that also the reviewed studies on the topic uncover to some extent. In particular, Armour and Cumming (2016) and Cumming and Macintosh (2006) find governmental programs to impact VC activity 17 in a negative way (see also the study of Cumming et al, 2017b, for more evidence on how governmental programs in Canada crowded out private investments; or the work of Cumming and Johan, 2009 on the risk that different governmental programs may end up cannibalizing themselves), while Da Rin et al (2006) report the opposite. Exactly for this contrasting result, the work of Da Rin et al (2006) was heavily criticized by Cumming (2011), who duly argues about the use of misleading measures of country VC activity behind such result, pointing to the risk that inaccurate information may have on policy makers about the effect of their own VC investment programs.…”

Section: Formal Institutions and Vcmentioning

confidence: 99%

See 2 more Smart Citations

Institutional Determinants of Venture Capital Activity: An Empirically Driven Literature Review and a Research Agenda

Grilli

Latifi

Mrkajic

2019

Journal of Economic Surveys

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Venture Capital (VC) was born and has flourished in the United States, yet it has only modestly developed in other geographical areas. A vast body of research has been carried out to investigate the factors which are conducive to VC activity, and that may better explain the differences in the degree of development and performance of VC industry across different geographical contexts. However, there has only been a limited effort in the literature to systematize what we know (and what we do not know) about the institutional factors that spur VC activity. This paper tries to close that gap, through a systematic survey of the existing literature on the institutional and related determinants of VC activity. Grounding on the seminal work of North (1990), we consider formal (e.g. laws and formal rules) and informal (e.g. cultural norms and tacit codes of behaviour) institutions which are found in the extant empirical economics and management literature to affect the development of the VC industry. Building on this careful review, our paper aims to propose interesting avenues for future research in this domain.

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“…Governmental programs Lelux and Surlemont (2003); Armour and Cumming (2016); Cumming and MacIntosh (2006) Da Rin et al…”

Section: Government Quality [13]mentioning

confidence: 99%

“…Interest rates Cumming and MacIntosh (2006) Bonini and Alkan (2012) Romain and van Pottelsberghe (2004)…”

Section: Type Of Institutionmentioning

confidence: 99%

Section: Formal Institutions and Vcmentioning

confidence: 99%

See 1 more Smart Citation

Institutional Determinants of Venture Capital Activity: An Empirically Driven Literature Review and a Research Agenda

Grilli

Latifi

Mrkajic

2019

Journal of Economic Surveys

View full text Add to dashboard Cite

show abstract

“…As a direct intervention in the VC market, the government injects public capital in the form of various government VC funds-government-sponsored VC funds 3 or government-managed VC funds 4 (Brander, Du, and Hellmann 2010). However, government VC funds that do not target the equity gap likely compete with private VC funds and eventually crowd them out of the VC market (Armour and Cumming 2004;Cumming and MacIntosh 2006). If government VC funds forego some expected returns by financing projects at below-market rates, they may attract the best projects, leaving only poorly performing companies for private VC funds (Leleux and Surlemont 2003).…”

Section: Introductionmentioning

confidence: 99%

How to Design Public Venture Capital Funds: Empirical Evidence from South Korea

Lim¹,

Kim²

2014

Journal of Small Business Management

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This study examines the effects of several features of government‐managed, sponsored venture capital (VC), and private VC funds on overall VC investments in new technology‐based firms (NTBFs) during two developmental stages (i.e., growth and restructuring) in South Korean VC market and suggests hints for designing effective government VC programs. Our results from data on 463 funds in the period 1995–2005 indicate the factors bearing a positive effect on VC investments targeted to NTBFs. Such factors are the fund specialization focusing on certain industrial sectors, performance‐sensitive compensation for venture capitalists in private and government VC funds.

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“…Th ere are multiple studies on the performance of venture capital guiding funds (VCGFs) in developed countries, including the United States, Canada, Australia, and so on. However, these analyses mostly operate at a country-specifi c level (Lerner, 1999(Lerner, , 2009Cumming and MacIntosh, 2006). Th is paper focuses on the performance of VCGFs by the local government in China, with a view to broadening the capital access and improving the efficiency of resource allocation for fi nancing high-tech startups.…”

Section: Introductionmentioning

confidence: 99%

How Government Venture Capital Guiding Funds Work in Financing High‐Tech Start‐Ups in China: A ‘Strategic Exchange’ Perspective

Wang

et al. 2013

Strategic Change

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The paper explores how the local government in China makes use of public-private partnership approach to promote the development of hi-tech industry in China with a case study of the operation mechanism of Venture Capital Guiding Funds (VCGF) in Hangzhou City, Zhejiang province, East China through the 'strategic exchange' perspective. The case study has important policy implications for the venture capital companies that intend to participate in the VCGFs of China. The local government in China usually plays a dominant role in the VCGFs due to the strategic resources it possesses. Under its specific institutional context, the public-private partnership approach needs to be interpreted differently from strategic level to operational level in China to improve the performance of VCGFs.

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Crowding Out Private Equity: Canadian Evidence

Cited by 71 publications

References 52 publications

Institutional Determinants of Venture Capital Activity: An Empirically Driven Literature Review and a Research Agenda

Institutional Determinants of Venture Capital Activity: An Empirically Driven Literature Review and a Research Agenda

How to Design Public Venture Capital Funds: Empirical Evidence from South Korea

How Government Venture Capital Guiding Funds Work in Financing High‐Tech Start‐Ups in China: A ‘Strategic Exchange’ Perspective

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