Public Policy, Entrepreneurship, and Venture Capital in the United States

Cumming, Douglas J.; Li, Dan

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Public Policy, Entrepreneurship, and Venture Capital in the United States

Journal of Corporate Finance, Forthcoming

43 Pages Posted: 5 Sep 2013

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University; Birmingham Business School; European Corporate Governance Institute (ECGI)

Dan Li

Chinese University of Hong Kong, Shenzhen

Date Written: September 4, 2013

Abstract

This paper empirically examines business starts, deaths, venture capital and patents in relation to U.S. public policy. The most consistent evidence in the data shows that lower levels of labor frictions and higher levels of SBIR awards are associated with more business starts and higher levels of venture capital per population. Counter to expectations, the data indicate a positive impact from the homestead exemption only among the bottom quartile homestead exemption states, and otherwise a negative impact. We analyze a variety of other policy instruments and compare the effects of policy in regular times with the financial crisis of 2008-2010.

Keywords: Entrepreneurial Finance, Venture Capital, Public Policy, Tax, Labor Law, Bankruptcy, SBIR

JEL Classification: G24, G32, G33, G38, K22, K31, K35, L26

Suggested Citation: Suggested Citation

Cumming, Douglas J. and Li, Dan, Public Policy, Entrepreneurship, and Venture Capital in the United States (September 4, 2013). Journal of Corporate Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2320438