Moderating effect of business environment on the relationship between fiscal science and technology expenditure and venture capital

Chengyu Bai and Jun Zheng

International Review of Financial Analysis, 2024, vol. 96, issue PA

Abstract: This study examines the nexus between fiscal science and technology (S&T) expenditure and venture capital growth using panel data from 293 prefecture-level cities from 2005 to 2022. Findings reveal that fiscal investments in S&T promote the development of venture capital. Furthermore, favorable business and financial environments positively moderate the stimulatory effect of fiscal S&T expenditure on venture capital. The impact of fiscal S&T expenditure on venture capital varies by region. This study bridges the theoretical gap in understanding the implications of the government's indirect support policies for venture capital and offers a fresh perspective on the dynamics between government and market forces.

Keywords: Venture capital; Fiscal science and technology investment; Business environment; Financial environment (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:96:y:2024:i:pa:s1057521924005878

DOI: 10.1016/j.irfa.2024.103655

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