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NBER Working Papers and Publications
|May 2010||Government Sponsored versus Private Venture Capital: Canadian Evidence|
with James A. Brander, Thomas F. Hellmann
in International Differences in Entrepreneurship, Josh Lerner and Antoinette Schoar, editors
|May 2008||Government Sponsored versus Private Venture Capital: Canadian Evidence|
with James A. Brander, Thomas F. Hellmann: w14029
This paper investigates the relative performance of enterprises backed by government-sponsored venture capitalists and private venture capitalists. While previous studies focus mainly on investor returns, this paper focuses on a broader set of public policy objectives, including value-creation, innovation, and competition. A number of novel data-collection methods, including web-crawlers, are used to assemble a near-comprehensive data set of Canadian venture-capital backed enterprises. The results indicate that enterprises financed by government-sponsored venture capitalists underperform on a variety of criteria, including value-creation, as measured by the likelihood and size of IPOs and M&As, and innovation, as measured by patents. It is important to understand whether such underperforma...