VENTURE CAPITAL, THE PUBLIC SECTOR AND THE HIGH-TECHNOLOGY INDUSTRY

Avi Messica () and Tamir Agmon ()
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Avi Messica: Technology Management Department, Holon Institute of Technology, 52 Golomb St., P.O.B 305, Holon 58102, Israel
Tamir Agmon: Graduate Business School, The College of Management, 7 Itzhak Rabin Boulevard, P.O.B 9017, Rishon Le-Zion 75190, Israel

International Journal of Innovation and Technology Management (IJITM), 2008, vol. 05, issue 01, 105-122

Abstract: We studied the optimal funding of the public sector for the Hi-Tech industry in the presence of short-term, cyclical, venture capital (VC) funding by constructing a decision-making model that results in the optimal governmental support and a model that accounts for the dynamics of the VC industry. We found that the VC industry is highly correlated with the NASDAQ stock index and that the optimal public policy for funding the Hi-Tech sector should be anti-cyclical, dynamic, and conditioned on the VC investments. The models and their validation are discussed as well as the practical implications for policy and decision makers.

Keywords: Public sector; government; venture capital; investment; high technology; Hi-Tech (search for similar items in EconPapers)
Date: 2008
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DOI: 10.1142/S0219877008001291

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