Search

This paper reviews the literature concerning the impact that venture capital investments have on economic growth, mainly focusing on the firm level. The authors consider new insights gained in the 1990s as well as North American and European practices. The authors provide an overview of recent explanations for the existence of venture capital and explore the impact of formal venture capitalists on growth and thus exclude informal or private investors. The authors summarize trends in venture capital in the United States and Europe, stressing the impact of government initiatives on macroeconomic growth. The authors conclude with theoretical progress made in venture capital research and offer suggestions for paths to take in the future.

This paper presents a methodology for evaluating the impact of public policies to assist the small business sector. The author reviews the various methodological approaches to evaluating small business support policies in developed economies. An analytical framework with six approaches is provided, beginning with the most simple and ending with the most sophisticated. These six steps include (1) take-up of schemes, (2) recipients' opinions, (3) recipients' views of the difference made by the assistance, (4) comparison of the performance of "assisted" with "typical" firms, (5) comparison with match firms, and (6) taking account of selection bias. Steps 1 to 3 are considered monitoring, with Steps 4 to 6 being evaluation. The difference between the two is that evaluations are attempts, demonstrating analytical rigor, to determine the impact of the policy initiatives. Monitoring either documents activity under the program or reports participants' perception of the value of the scheme.