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Center for Financial Studies (CFS), Universität Frankfurt a. M. >
CFS Working Paper Series, Universität Frankfurt a. M. >
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http://hdl.handle.net/10419/25495
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| Title: | | Public policy and venture capital financed innovation: A contract design approach  |
| Authors: | | Hirsch, Julia |
| Issue Date: | | 2006 |
| Series/Report no.: | | CFS Working Paper 2006/29 |
| Abstract: | | The effects of public policy programs which aim at internalizing spill-overs due to successful innovation are analyzed in a sequential double-sided moral hazard doublesided adverse selection framework. The central focus lies in analyzing their impact on contract design. We show that in our framework only ex post grants are a robust instrument for implementing the first-best situation, whereas the success of guarantee programs, ex ante grants and some types of investment grants depends strongly on the characteristics of the project: in certain cases they not only give no further incentives but even destroy contract mechanisms and so worsen the outcome. |
| Subjects: | | Public Policy Contract Design Venture Capital Moral Hazard Asymmetric Information |
| JEL: | | D82 G24 G32 H25 H81 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CFS Working Paper Series, Universität Frankfurt a. M.
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