Original scientific paper

https://doi.org/10.1080/1331677X.2019.1629979

The impact of state intervention on the Hungarian venture capital market

László Kállay ; Small Business Development Centre, Corvinus University of Budapest, Budapest, Hungary
Erika Jáki ; Department of Enterprise Finances, Corvinus University of Budapest, Budapest, Hungary

Abstract

As part of its National Development Programmes in the period 2007–2013 Hungary implemented venture capital instruments to improve the competitiveness of small and medium sized companies. The concrete instruments included both fully and partly state-owned VC funds significantly increasing equity finance available for the target group. In our article, we investigate the impact of the state intervention on the quality of the VC portfolios built through the programmes. We point out that the key indicators of the portfolio do not promise a significant increase in aggregate company value and they deteriorated in the later years of the programme as the public funding was increased. We draw the conclusion that the size and quality of the venture capital market determines the efficient volume and type of state intervention

Keywords

venture capital; government intervention; supply shock; investment pressure; crowding out impact; SME finance

Hrčak ID:

229807

URI

https://hrcak.srce.hr/229807

Publication date:

9.2.2021.

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