The Dance Between Government and Private Investors: Public Entrepreneurial Finance around the Globe

Jessica Bai, Shai Bernstein, Abhishek Dev and Josh Lerner

No 28744, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the interaction between governments and private capital investors when financing early-stage ventures. We first provide a simple conceptual framework to explore when collaboration between governments and private investors is likely to emerge. Using hand-collected data on 755 programs worldwide, we find that government programs frequently involve private capital investors. Collaboration is greater when governments are more effective, when programs target earlier-stage companies, and when the local private venture market is more developed. Such collaborations mostly occur through joint equity investments and matching-funds requirements. These findings underscore the importance of government synergies with local private capital markets.

JEL-codes: G24 H81 (search for similar items in EconPapers)
Date: 2021-04
New Economics Papers: this item is included in nep-cfn
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