Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152864
Authors: 
Da Rin, Marco
Nicodano, Giovanna
Sembenelli, Alessandro
Year of Publication: 
2005
Series/Report no.: 
ECB Working Paper 430
Abstract: 
We study how public policy can contribute to increase the share of early stage and high-tech venture capital investments, thus helping the development of active venture capital markets. A simple extension of the seminal model by Holmstrom and Tirole (1997) provides a theoretical base for our analysis. We then explore a unique panel of data for 14 European countries between 1988 and 2001. We have several novel findings. First, the opening of stock markets targeted at entrepreneurial companies positively affects the shares of early stage and high-tech venture capital investments; reductions in capital gains tax rates have a similar, albeit weaker, effect. Second, a reduction in labor regulation creases the share of high-tech investments. Finally, we find no evidence of a shortage of supply of venture capital funds, and no evidence of an effect of increased public R&D spending on the share of high-tech or early stage venture capital investments.
Subjects: 
Barriers to Entrepreneurship
Capital Gains Tax
Public Policy
Public R&D Expenditure
Stock Markets
Venture Capital
JEL: 
G10
G24
H20
O30
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.