Dynamic Efficiency and Path Dependencies in Venture Capital Markets

by Andrea Schertler

Overview

This book offers a new explanation why venture capital in investments differ substantially between countries. Recent literature has attributed these differences to differences in the financial architecture and tax regulations. By contrast, this book shows by using simulations of a general equilibrium model that interactions between venture capitalists' reputation building and experience accumulation lead to different levels of venture capital investments. The interactions taking place in venture capital markets can result in inefficiencies in experience accumulation. The study argues that government subsidies in such a situation may increase venture capitalists' experience accumulation. However, using an agency model, this study shows that subsidies can have negative effects since they reduce venture capitalists' incentives to support the management teams.

Product Details

ISBN-13:	9783540407102
Publisher:	Springer Berlin Heidelberg
Publication date:	02/12/2004
Series:	Kieler Studien - Kiel Studies , #327
Edition description:	2003
Pages:	192
Product dimensions:	6.10(w) x 9.25(h) x 0.02(d)

Table of Contents

Motivation.- Venture Capital Finance in the United States and in Germany.- Dynamic Efficiency of Venture Capital Markets.- The Effects of Public Subsidies on Path Dependencies in Venture Capital Markets.- Concluding Remarks.