Venture capital dynamics, the public sector and the high technology industry
by Avi Messica, Tamir Agmon
International Journal of Entrepreneurship and Innovation Management (IJEIM), Vol. 10, No. 3/4, 2009

Abstract: The high technology (hi-tech) sector has become an important factor for economic growth in many countries. Israel is an extreme case where most of the production of the hi-tech sector is exported, and moreover, comprises more than half of its industrial exports. In this study, we focused on the optimal funding of the public sector for the hi-tech industry in the presence of short-term, cyclical, venture capital funding. We addressed the first issue by constructing a decision-making model that results in the optimal governmental support for the hi-tech sector. For the latter issue, we constructed a model that accounts for the dynamics of the venture capital (VC) industry over 1995-2005. Our findings indicate that the VC industry is highly correlated with the NASDAQ composite stock index and that it is a supply-driven market. The optimal public sector's policy for funding the hi-tech sector should be anti-cyclical, dynamic and conditioned on the VC investments as well as on the specific sector that is supported. The models and their validation against empirical data are presented and discussed as well as the practical implications for policy and decision-makers.

Online publication date: Sat, 23-May-2009

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Entrepreneurship and Innovation Management (IJEIM):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com