VC/PE Funds, Government Grants and Innovation in Newly Public Firms

65 Pages Posted: 5 Feb 2013 Last revised: 12 Jun 2015

See all articles by Mark Humphery-Jenner

Mark Humphery-Jenner

University of New South Wales (UNSW); UNSW Business School; Financial Research Network (FIRN)

Jo-Ann Suchard

Financial Research Network (FIRN); UNSW Business School

Date Written: February 5, 2013

Abstract

We highlight the circular relationship between venture capital and private equity (VC/PE) investment, R&D grants, and innovation. We focus on Australia, which has low levels of innovation and VC/PE activity, but has a comparable legal environment to other developed, but high innovation markets. We show that government grants encourage VC/PE investment and that VC funds and government grants increase both innovation inputs (R&D) and outputs (patents and citations) in newly public firms. Buyout funds only increase outputs, and large funds and domestic funds are best able to induce innovation outputs. This highlights the importance of both grant schemes and VC/PE investment to innovation.

Keywords: innovation, R&D, patents, venture capital, private equity, grants, VC, PE

JEL Classification: G24, G31, O31, O32

Suggested Citation

Humphery-Jenner, Mark and Humphery-Jenner, Mark and Suchard, Jo-Ann and Suchard, Jo-Ann, VC/PE Funds, Government Grants and Innovation in Newly Public Firms (February 5, 2013). UNSW Australian School of Business Research Paper No. 2013 BFIN 01, Available at SSRN: https://ssrn.com/abstract=2211919 or http://dx.doi.org/10.2139/ssrn.2211919

Mark Humphery-Jenner (Contact Author)

University of New South Wales (UNSW) ( email )

Kensington
High St
Sydney, NSW 2052
Australia

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Jo-Ann Suchard

UNSW Business School ( email )

high street
High St
sydney, NSW 2052
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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