Publications
Publications
- 2021
- HBS Working Paper Series
The Dance Between Government and Private Investors: Public Entrepreneurial Finance around the Globe
By: Jessica Bai, Shai Bernstein, Abhishek Dev and Josh Lerner
Abstract
This paper examines the interaction between governments and private capital investors when financing early-stage ventures. We first provide a simple conceptual framework to explore when collaboration between governments and private investors is likely to emerge. Using hand-collected data on 755 programs worldwide, we find that government programs frequently involve private capital investors. Collaboration is greater when governments are more effective, when programs target earlier-stage companies, and when the local private venture market is more developed. Such collaborations mostly occur through joint equity investments and matching-funds requirements. These findings underscore the importance of government synergies with local private capital markets.
Keywords
Public Entrepreneurship; Subsidy; Industrial Policy; Entrepreneurship; Public Sector; Financing and Loans; Venture Capital; Global Range
Citation
Bai, Jessica, Shai Bernstein, Abhishek Dev, and Josh Lerner. "The Dance Between Government and Private Investors: Public Entrepreneurial Finance around the Globe." Harvard Business School Working Paper, No. 21-120, April 2021. (Revised January 2022.)