Direct and indirect effects of private- and government-sponsored venture capital

Engberg, Erik; Tingvall, Patrik Gustavsson; Halvarsson, Daniel

doi:10.1007/s00181-019-01770-w

Cited by 16 publications

(19 citation statements)

References 67 publications

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“…The GVCs' primary goal is to foster regional growth and sustainability by financing responsible SMEs that may enable the GVCs to reach their goals. This finding aligns well with those reported in the literature comparing GVC and PVC performance (Engberg et al 2019). This literature reveals differences in the goals of GVCs and PVCs (Lerner 2002).…”

Section: Overviewsupporting

confidence: 91%

“…Research on GVCs has typically focused on macro perspectives such as national policies and institutional factors, performance of European government venture capital programs, and GVCs' impact on the performance of SMEs in GVCs' portfolios (Block et al 2018;Engberg et al 2019;Lerner 2000Lerner , 2002Callagher et al 2015). Scholars know little about the specific conditions under which GVCs operate when they are on the cusp of making funding decisions (Laitinen 1992;Winthrop et al 2002).…”

Section: Introductionmentioning

confidence: 99%

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Sustainable Investments in Responsible SMEs: That’s What’s Distinguish Government VCs from Private VCs

Johansson

Malmström

Wincent

2021

JRFM

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Researchers question the impact of governmental venture capitalists (GVC) compared to private venture capitalists (PVC), but we know little about why this difference occurs and if this criticism is justified. We observed a group of GVCs and developed a new model that describes the way that GVCs process signals pre- and post-decisions. Certain macro level factors severely undermine micro level performance, causing GVCs to financially underperform with respect to PVCs. This helped us to understand that GVCs do not make investment decisions in the same way as PVCs, and what undermines the performance of GVCs’ decision-making processes. The main goals of GVCs are to promote investments in responsible SMEs, mobilizing societal impact. We discuss that the criticism of GVC needs to be more nuanced, as they have a different role than PVC in the financial system as providers of sustainable investments in responsible SMEs.

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Section: Overviewsupporting

confidence: 91%

Section: Introductionmentioning

confidence: 99%

Sustainable Investments in Responsible SMEs: That’s What’s Distinguish Government VCs from Private VCs

Johansson

Malmström

Wincent

2021

JRFM

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“…The direct provision of supporting programs and resources (e.g., SBA loan and training programs) also often requires the cooperation of local government. However, research confirms government is usually less efficient than markets at allocating resources that stimulate or facilitate entrepreneurship (Engberg et al, 2021;Solomon et al, 2021).…”

Section: Government Failure and Social Entrepreneurshipmentioning

confidence: 99%

“…Examples of such imperfections include regulatory constraints, and limited access to financial, skilled labor, and other resources required by startups. Although government entities, like the State, may strive to stimulate entrepreneurial activity by reducing regulatory barriers, the ability to reduce barriers like access to business licensing, resides in the local government's hands (Engberg, Tingvall, & Halvarsson, 2021; Solomon, Bendickson, Liguori, & Marvel, 2021). The direct provision of supporting programs and resources (e.g., SBA loan and training programs) also often requires the cooperation of local government.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Local context and post‐crisis social venture creation

Anokhin

Morgan

Christensen

et al. 2022

Strategic Entrepreneurship

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Research summary We investigate the effects of local market and government failure on the creation of social ventures in the context of post‐crisis recovery during the period following the dot‐com crisis and ending before the housing bubble burst across all Ohio counties. Drawing on social embeddedness theory, we posit that social venture creation rates vary across local contexts and are higher in communities characterized by market and government failures. Longitudinal contextual data from 88 Ohio counties indicates that situations characterized by failures of both types are especially conducive to the creation of local social enterprises. We address the shortage of longitudinal quantitative studies focused on the emergence of social entrepreneurship and identify conditions where the relationship between local context and social venture creation is important. Managerial summary The purpose of this article is to examine how local context affects the rate of social venture creation in the United States. We study these rates in every county in Ohio in the aftermath of a crisis and find that local government responses and local market conditions singly and in combination lead to increased rates of local social venture creation. Fewer social ventures emerge when transfer (welfare) payments are high. However, rates rise in response to high unemployment, even when welfare payments are high, and are greater when welfare payments are low. This means the extent and type of local market and government failures influence the rate of local social venture creation. Findings advance the study of domestic social entrepreneurship in the aftermath of crises.

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“…Since these firms are in a declining industry, removing their subsidies might lead to a violent collapse of the industry, with large political ramifications. One difference that Engberg et al (2017) finds between government-sponsored and private venture capital is that the former (GVC) is more likely to make follow up investments in stagnating firms. Pulling out of stagnant firms could lead to these firms going bankrupt, with potential negative political consequences.…”

Section: Political Failures Related To Innovation Policiesmentioning

confidence: 99%

Political Failures in Innovation Policy: A Cautionary Note

Kärnä

Karlsson

Svensson³

et al. 2020

SSRN Journal

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Within the field of innovation studies, researchers have identified several market failures that hamper investment in R&D, innovation and growth in a market economy. Several policies such as government subsidies, tax deductions, soft loans, and public venture capital provided to firms that pursue R&D have therefore been recommended by researchers, in addition to regulations to increase the quality and standards of goods and services. Less attention has been paid to government failures in cases where a policy fails to achieve its stated goal, often due to conflicts between the interests of special interest groups and the public. This paper discusses the concept of government failure within an innovation policy context and why this perspective is important for policy design since it is likely that policies that aim to reduce market failures could suffer from political failures. A text analysis of all papers published in 5 leading innovation journals between 2010 and 2019, a total of 5,526 papers, indicates a lack of research about government failures, which could lead to recommendations from researches to policymakers not being successful due to political failures.

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Direct and indirect effects of private- and government-sponsored venture capital

Cited by 16 publications

References 67 publications

Sustainable Investments in Responsible SMEs: That’s What’s Distinguish Government VCs from Private VCs

Sustainable Investments in Responsible SMEs: That’s What’s Distinguish Government VCs from Private VCs

Local context and post‐crisis social venture creation

Political Failures in Innovation Policy: A Cautionary Note

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