Josh Lerner

"Public Entrepreneurial Finance around the Globe"


This paper examines how government funding programs geared towards early-stage companies interact with private capital markets. Using hand-collected data on 755 government programs worldwide, we find that governments’ allocations to such funding programs in the past decade have been comparable to global venture capital disbursements. Government programs were more frequent in periods with more private venture activity, a relationship that was stronger in nations with better public governance. The programs’ structures often relied on the local private sector. The private sector’s involvement was greater when government programs targeted earlier stage companies and when rankings of government effectiveness were higher. These findings suggest complementarity between public and private entrepreneurial finance.