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Title:Public policy and venture capital financed innovation: A contract design approach PDF Logo
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
Persistent Identifier of the first edition:urn:nbn:de:hebis:30-38039
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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