TY  - JOUR
AU  - Lerner,Josh
TI  - The Government as Venture Capitalist: The Long-Run Effects of the SBIR  Program
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5753
PY  - 1996
Y2  - September 1996
UR  - http://www.nber.org/papers/w5753
L1  - http://www.nber.org/papers/w5753.pdf
N1  - Author contact info:
Josh Lerner
Harvard Business School
Rock Center 214
Boston, MA 02163
Tel: 617/495-6065
Fax: 617/496-7357
E-Mail: jlerner@hbs.edu
AB  - Public programs to provide early-stage financing to firms, particularly high-technology companies, have become commonplace in the United States and abroad.  The long-run effectiveness of these programs, however, has attracted little empirical scrutiny. This paper examines the impact of the largest U.S. public venture capital initiative, the Small Business Innovation Research (SBIR) program, which has provided over $6 billion to small high-technology firms between 1983 and 1995.  Using a unique database" of awardees compiled by the U.S. General Accounting Office, I show that SBIR awardees grew significantly faster than a matched set of firms over a ten-year period.  The positive effects of SBIR awards were confined to firms based in zip codes with substantial venture capital activity.  The findings are consistent with both the corporate finance literature on capital constraints and the growth literature on the importance of localization effects.
ER  -