Public policy and venture capital financed innovation : a contract design approach
The effects of public policy programs which aim at internalizing spill-overs due to successful innovation are analyzed in a sequential double-sided moral hazard doublesided adverse selection framework. The central focus lies in analyzing their impact on contract design. We show that in our framework only ex post grants are a robust instrument for implementing the first-best situation, whereas the success of guarantee programs, ex ante grants and some types of investment grants depends strongly on the characteristics of the project: in certain cases they not only give no further incentives but even destroy contract mechanisms and so worsen the outcome. JEL Classification: D82, G24, G32, H25, H81
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| Author: | Julia Hirsch |
|---|---|
| URN: | urn:nbn:de:hebis:30-38039 |
| Series (Serial Number) | CFS working paper series (2006, 29) |
| Document Type: | Working Paper |
| Language: | English |
| Date of Publication (online): | 23.02.2007 |
| Year of first Publication: | 2006 |
| Publishing Institution: | Univ.-Bibliothek Frankfurt am Main |
| Tag: | Asymmetric Information; Contract Design ; Moral Hazard ; Public Policy ; Venture Capital |
| HeBIS PPN: | 190882859 |
| Institutes: | Center for Financial Studies (CFS) |
| Dewey Decimal Classification: | 330 Wirtschaft |
| Sammlungen: | Universitätspublikationen |
| Note: | Version Dezember 2006 |
| Licence (German): |  Veröffentlichungsvertrag für Publikationen ohne Print on Demand |
