The Impact of Government Funds in Venture Capital on Investment in Early-Stage Firms: An Evidence from Korean Venture Capital

??? ????????? ?????????????????? ?????? ????????? ??????????????? ?????????????????? ????????? ?????? ????????? ?????????????????? ?????? ?????????. ?????????????????? ??????????????? ????????? ???????????? ????????? ???????????? ???????????? ????????? ??????????????? ?????? ????????? ????????? ????????? ???????????? ????????????, ???????????? ??????, ???????????? ????????? ????????????, ?????????????????? ????????????, ???????????? ??????????????? ???????????? ????????? ????????? ??????. ????????? ????????? ????????????, ??? ????????? ????????? ????????? ??????. ??? ???, ?????????????????? ????????? ?????????????????? ?????????????????? ????????? ?????? ????????? ??????????????? ????????? ?????? ?????????. ??? ???, ????????????????????? ?????? ??????????????? ????????? ???????????? ????????? ?????????????????? ?????????????????? ????????? ????????? ??????????????? ?????? ?????? ???????????? ????????? ?????????????????? ?????? ??? ?????????. ??? ???, ?????????????????? ?????????????????? ????????? ????????? ?????? ??????????????? ?????? ?????? ????????? ?????? ???????????? ???U??? ????????? ?????? ?????????. ??? ????????? 2010????????? 2013??? ?????? ??????????????? ?????? ????????? 105??? ????????????????????? ????????? ????????? ?????? ??????????????? ???????????? ?????? ????????? ???????????? ?????? ???????????????. ????????????????????? ????????? ????????? ????????? ????????? ?????? ??? ?????? ????????? ?????? ???????????? ????????? ????????? ?????????. ??? ????????? ?????????????????? ???????????? ??? ??????????????? ????????? ??????????????? ?????? ????????? ????????? ??????????????? ????????? ????????? ?????? ?????? ??????????????? ????????? ?????? ???????????? ??? ??????????????? ????????? ????????? ???????????? ?????? ???????????? ????????? ??????????????? ????????? ????????? ?????????. This study examines the impact of government funds to venture capital on investment in early-stage firms. We provide novel explanations about this relationship focusing on mechanisms by which government funds influence the perceived uncertainty, decision about investment priority, scale economy of investment, information asymmetry in investment decision, and capital expense. We argue that venture capital’s investment in early-stage firms increases as government funds increase and as government funds are explicitly directed for early-stage firms. However, we further claim that the impact of government funds on early-stage investment will be decreasing as their size increases and finally be reverted to negative impact beyond a certain amount of funds to show inverse-U relationship. Our empirical examination using data from 105 Korean venture firms active as of 2013 consistently supports the claims. This study contributes to the venture capital literature by providing novel arguments about mechanisms and effects of policy intervention in venture capital. In practice, we expect our results will provide an opportunity for relevant policy makers to review their venture support policy based on empirical evidences for policy effects