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

AVI MESSICA

Technology Management Department, Holon Institute of Technology, 52 Golomb St., P.O.B 305, Holon 58102, Israel

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and

TAMIR AGMON

Graduate Business School, The College of Management, 7 Itzhak Rabin Boulevard, P.O.B 9017, Rishon Le-Zion 75190, Israel

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https://doi.org/10.1142/S0219877008001291Cited by:2 (Source: Crossref)

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:

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