PREFACE
1. See Tor Klette, Jarle Moen, and Zvi Griliches, “Do Subsidies to Commercial R&D Reduce Market Failures? Microeconomic Evaluation Studies,” Research Policy 29 (2000): 471–95, for an overview of the current state of empirical research in this area.
CHAPTER 1: INTRODUCTION
1. “AIG Gets $150 Billion Government Bailout; Posts Huge Loss,” Reuters News Service, November 10, 2008, and Nelson D. Schwartz, “UBS Given an Infusion of Capital,” New York Times, October 16, 2008.
2. The Global Entrepreneurship Monitor’s tabulations are available at “The Global Entrepreneurship Monitor,” http://www.gemconsortium.org/ (accessed July 11, 2008). It should be noted that the results of these and similar comparisons, which rely on surveys with different sampling methodologies and survey responses in different languages across countries, must be viewed with some caution.
3. This account is based on Economist, “Dubai: Facts and Figures,” http://www.economist.com/cities/findStory.cfm?CITY_ID=DUB&FOLDER=Facts-History (accessed August 10, 2008) and related articles; Ali Tawfik Al Sadik, “Evolution and Performance of the UAE Economy, 1972–1998,” in United Arab Emirates: A New Perspective, ed. Ibrahim Abed and Peter Hellyer (London: Trident Press, 2001), 202–30; and William Goetzmann and Irina Tarris, “Dubailand: Destination Dubai,” Harvard Business School Case (2007): no. 9-207-005.
4. This account is based, among other sources, on Jacques Horovitz and Anne-Valerie Ohlsson, “Dubai Internet City: Serving Business,” IMD Case (2005): no. 224; and Daron K. Roberts, Inder Singh, and Johnny Vong, Dubai Internet City as a Policy Intervention for ICT Growth: An Analysis of Dubai’s Strategy to Cultivate an ICT Cluster, unpublished Policy Analysis Exercise, John F. Kennedy School of Government, Harvard University, 2004.
5. See, for instance, Chip Cummings, “Dubai’s Debt Cloud,” Wall Street Journal, December 14, 2007; Stanley Reed, “The Downturn Hits Dubai,” Business Week Online, December 3, 2008, http://www.businessweek.com/globalbiz/content/dec2008/gb2008123_682864.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis (accessed February 11, 2009); and Robert F. Worth, “Laid-Off Foreigners Flee as Dubai Spirals Down,” New York Times, February 11, 2009.
6. For overviews of economic policies in Jamaica and Singapore, see Owen Jefferson, Stabilization and Stagnation in the Jamaican Economy, 1972–97: Some Reflections on Macroeconomic Policy over the Past Twenty-five Years (Kingston: University of the West Indies, 1999); and Koh Ai Tee, ed., The Singapore Economy in the 21st Century: Issues and Strategies (New York: McGraw-Hill, 2002). This section has benefited greatly from conversations with Peter Henry, as well as from his white paper, “The Jamaican Economy: Maintaining Stability and Moving to Growth,” working paper, Stanford University, 2006.
7. These figures are computed using the Central Intelligence Agency, 2008 World Factbook (Langley, VA: CIA, 2008); Council of Economic Advisors, Executive Office of the President, 2008 Economic Report of the President (Washington, D.C.: Government Printing Office, 2008); and the World Bank’s World Development Indicators database.
8. Vanetta Skeete, Claudette Williams-Myers, Olusegun Afis Ismail, and Sandra Glasgow, Global Entrepreneurship Monitor: 2006 Jamaica Report (Kingston: University of Technology, 2007).
9. Sandra Glasgow, Claudette Williams-Myers, Vanetta Skeete, and Olusegun Afis Ismail, Global Entrepreneurship Monitor: 2005 Jamaica Report (Kingston: University of Technology, 2006).
10. International Finance Corporation, “Doing Business: Jamaica,” http://www.doingbusiness.org/ExploreEconomies/?economyid=97 (accessed August 8, 2008).
11. International Finance Corporation, “Doing Business: Singapore,” http://www.doingbusiness.org/ExploreEconomies/?economyid=167 (accessed August 8, 2008).
12. International Finance Corporation, “Doing Business: United States,” http://www.doingbusiness.org/ExploreEconomies/?economyid=197 (accessed August 8, 2008).
13. Henry, “The Jamaican Economy,” 12.
CHAPTER 2: A LOOK BACKWARDS
1. This figure is compiled from various publications and web sites of the Canadian, European, Israeli, and U.S. (National) venture capital associations, as well as those of the Asian Venture Capital Journal. In some nations where venture capital investments are not clearly delineated, I employ seed and start-up investments.
2. The sources for the 1996 chart are the same as those in figure 2.1. The 2007 chart is based on Ernst & Young, Innovation: The Growing Importance of Venture Capital: Global Venture Capital Insights and Trends Report, 2008 (New York: Ernst & Young, 2008) and the European Private Equity and Venture Capital Association, EVCA 2008 Yearbook (Brussels: European Private Equity and Venture Capital Association, 2008). Ernst & Young’s definitions of venture activity differ somewhat from the other sources, and hence the 2007 data in figures 2.1 and 2.2 are not completely consistent.
3. See William R. Kerr, “Ethnic Scientific Communities and International Technology Diffusion,” Review of Economics and Statistics 90 (2008): 518–37.
4. This figure was compiled from the web site and publications of SDC Venture Economics.
5. See, for instance, Linda Himelstein, “Squabbling among the Rich and Famous: After Months of Fighting, 12 Entrepreneuring Is in Trouble,” Business Week 3759 (November 26, 2001): 72–73; Stefan Krempl, “We Will Survive,” Financial Times, May 25, 2001; and Simon English, “Internet Entrepreneur Celebrates Pounds 61m Deal,” Independent, May 11, 2006.
6. The time series in this figure is taken from various editions of the Asian Venture Capital Journal’s Asian Private Equity 300 Guide and Guide to Venture Capital in Asia.
7. This account is drawn from Henny Sender, “China Tries Venture Capitalism—the Government Emulates Western Counterparts—Its Own Way—Having Missed the Industrial Revolution, They Can’t Afford to Miss This One, Says Singaporean Partner,” Asian Wall Street Journal, January 3, 2001; and Feng Zeng, “Venture Capital Investments in China,” Ph.D. diss., Pardee Rand Graduate School, 2004.
8. Felda Hardymon, Ann Leamon, and Josh Lerner, “Chengwei Ventures and the hdt* Investment,” Harvard Business School Case (2002): no. 9-802-089.
9. T. J. Rodgers, Why Silicon Valley Should Not Normalize Relations with Washington D.C. (Washington, D.C.: Cato Institute, 2000), 2–9.
10. While there are a substantial number of histories of Silicon Valley, most helpful in the preparation of this account were Stuart W. Leslie and Robert H. Kargon, “Selling Silicon Valley: Frederick Terman’s Model for Regional Advantage,” Business History Review 70 (1996): 435–72; Annalee Saxenien, Regional Advantage: Culture and Competition in Silicon Valley and Route 128 (Cambridge: Harvard University Press, 1994); and especially Timothy J. Sturgeon, “How Silicon Valley Came to Be,” in Understanding the Silicon Valley: Anatomy of an Entrepreneurial Region, ed. Martin Kenney (Stanford: Stanford University Press, 2000), 15–47.
11. Sturgeon, “Silicon Valley,” 16.
12. Ibid., 17–23.
13. Leslie and Kargon, “Selling Silicon Valley,” 419.
14. For systematic evidence of the importance of spin-offs in Silicon Valley, see Paul Gompers, Josh Lerner, and David Scharfstein, “Entrepreneurial Spawning: Public Corporations and the Genesis of New Ventures, 1986 to 1999,” Journal of Finance 60 (2005): 577–614.
15. Sturgeon, “Silicon Valley,” 30–34.
16. Ibid., 34 and 45–46.
17. Saxenien, Regional Advantage, 21.
18. This paragraph is largely based on ibid., 22–23.
19. For one discussion of the limitations of public efforts to boost entrepreneurial firms in the 1920s, see Joseph L. Nicholson, “The Fallacy of Easy Money for Small Business,” Harvard Business Review 17:1 (Autumn 1938): 31–34.
20. This history of American Research and Development is largely drawn from Spencer Ante, Creative Capital: Georges Doriot and the Birth of Venture Capital (Boston: Harvard Business School Press, 2008); and Patrick R. Liles, Sustaining the Venture Capital Firm (Cambridge, Mass.: Management Analysis Center, 1978).
21. Ralph Flanders, “The Problem of Development Capital,” Commercial and Financial Chronicle 162:4442 (November 29, 1945): 2576, 2608.
22. Liles, Venture Capital Firm, 32.
23. Gene Bylinsky, “General Doriot’s Dream Factory,” Fortune 76:2 (August 1967): 103–36.
24. This history of the SBIC program is drawn from C. M. Noone and S. M. Rubel, SBICs: Pioneers in Organized Venture Capital (Chicago: Capital Publishing, 1970); Jonathan J. Bean, Big Government and Affirmative Action: The Scandalous History of the Small Business Administration (Lexington: University Press of Kentucky, 2001); and Liles, Venture Capital Firm.
25. Bean, Big Government, 56.
26. See the discussion, for instance, in Vyvyan Tenorio, “SBA’s Dilemma: Troubled VCs,” Daily Deal, September 9, 2002; and Bean, Big Government.
27. Timothy Bates, “The Minority Enterprise Small Business Investment Company Program: Institutionalizing a Nonviable Minority Business Assistance Infrastructure,” Urban Affairs Review 32 (1997): 683–703.
28. This history is based on Felda Hardymon, Ann Leamon, and Josh Lerner, “3i Group PLC,” Harvard Business School Case (2003): no. 9-803-020; “3i, Fifty Years of Growth: 1945–1995,” private document; and Richard Coopey and Donald Clarke, 3i: Fifty Years Investing in Industry (Oxford: Oxford University Press, 1995).
CHAPTER 3: WHY SHOULD POLICYMAKERS CARE?
1. Morris Abramowitz, “Resource and Output Trends in the United States since 1870,” American Economic Review 46 (1956): 5–23.
2. Robert M. Solow, “Technical Change and the Aggregate Production Function,” Review of Economics and Statistics 39 (1957): 312–20.
3. The interested reader can turn to surveys by Pierre Azoulay and Josh Lerner, “Technological Innovation and Organizations,” in Handbook of Organizational Economics, ed. Robert Gibbons and John Roberts (Princeton: Princeton University Press, forthcoming); and Wesley M. Cohen and Richard C. Levin, “Empirical Studies of Innovation and Market Structure,” in Handbook of Industrial Organization, vol. 2, ed. Richard Schmalensee and Robert D. Willig (New York: North-Holland, 1989), chap. 18.
4. Wesley M. Cohen, Richard C. Levin, and David C. Mowery, “Firm Size and R&D Intensity: A Re-examination,” Journal of Industrial Economics 35 (1987): 543–63.
5. Zoltan J. Acs and David B. Audretsch, “Innovation in Large and Small Firms: An Empirical Analysis,” American Economic Review 78 (1988): 678–90.
6. John Jewkes, David Sawers, and Richard Stillerman, The Sources of Invention (New York: St. Martin’s Press, 1958).
7. The first example of the arguments along these lines I am aware of is Richard N. Foster, Innovation: The Attackers’ Advantage (London: Macmillan, 1986).
8. See, for instance, Debra J. Aron and Edward P. Lazear, “The Introduction of New Products,” American Economic Review Papers and Proceedings 80 (1990): 421–26.
9. Thomas J. Prusa and James A. Schmitz Jr., “Can Companies Maintain Their Initial Innovation Thrust? A Study of the PC Software Industry,” Review of Economics and Statistics 76 (1994): 523–40.
10. This account is based on, among other sources, Felda Hardymon and Ann Leamon, “Celtel International B.V.,” Harvard Business School Case (2006): no. 9-805-061; Ian Giddy, “The Acquisition of Celtel An African Company’s choice: IPO or Sale,” New York University Case (2007): unnumbered, posted at http://pages.stern.nyu.edu/~igiddy/cases/mtc-celtel.htm (accessed October 15, 2008); Fundamo, “Celplay Zambia Upgrades Technology to Directly Answer African Population Requirements,” http://www.fundamo.com/article14.aspx (accessed October 9, 2008).
11. Zain, “Mobile Telephony to Reach 400,000 People in Remote African Villages,” http://www.zain.com/muse/obj/lang.default/portal.view/content/Media%20centre/Press%20releases/AfricaMillennium Villages (accessed October 8, 2008).
12. William A. Wells, “Venture Capital Decision Making.” Ph.D. diss., Carnegie-Mellon University, 1974.
13. David Amis and Howard Stevenson, Winning Angels (New York: Pearson Education Limited, 2001), 114.
14. T. T. Tyebjee and A. V. Bruno, “A Model of Venture Capitalist Investment Activity,” Management Science 30 (1984): 1051–66.
15. Steven N. Kaplan and Per Stromberg, “Characteristics, Contracts, and Actions: Evidence from Venture Capitalist Analyses,” Journal of Finance 109 (2004): 2173–2206.
16. Paul Gompers and Josh Lerner, The Venture Capital Cycle (Cambridge: MIT Press, 1999).
17. Wells, “Venture Capital Decision Making,” 47; and George W. Fenn, Nellie Liang, and Stephen Prowse, The Economics of the Private Equity Market (Washington, D.C.: Federal Reserve Board, 1996).
18. Bessemer Venture Partners, “Anti-Portfolio,” http://www.bvp.com/Portfolio/AntiPortfolio.aspx (accessed July 12, 2008).
19. Michael Gorman and William A. Sahlman, “What Do Venture Capitalists Do?” Journal of Business Venturing 4 (1989): 231–48.
20. This figure is based on the author’s tabulation of unpublished data from SDC Venture Economics, with supplemental information from Compustat and the Center for Research into Securities Prices (CRSP) databases.
21. This discussion is based on James T. Areddy, “Venture Capital Swarms China,” Wall Street Journal, March 14, 2006; “Chinese Startup Lingtu Collaborates with IBM to Reach New Markets,” PR Newswire, June 28, 2006; Felda Hardymon and Ann Leamon, “Gobi Partners: Raising Fund II,” Harvard Business School Case (2007): no. 9-807-093; and conversations with key practitioners.
22. Hardymon and Leamon, “Gobi Partners,” 9.
23. Ibid.
24. The discussion is based on Abraaj Capital, Annual Report (Dubai: Abraaj, 2008); Ant Bozkaya and Josh Lerner, “Abraaj Capital,” Harvard Business School Case (2008): no. 9-809-008; and Sarmad Khan, “Abraaj Sells Its Stake in National Air Services,” National (Dubai), June 17, 2008.
25. This figure is based on the author’s tabulation of unpublished data from SDC Venture Economics, with supplemental information from Compustat and the Center for Research into Securities Prices (CRSP) databases.
26. Thomas Hellmann and Manju Puri, “The Interaction between Product Market and Financing Strategy: The Role of Venture Capital,” Review of Financial Studies 13 (2000): 959–84.
27. Samuel S. Kortum and Josh Lerner, “Assessing the Contribution of Venture Capital to Innovation,” Rand Journal of Economics 31 (2000): 674–92.
28. Patent applicants and examiners at the patent office include references to other relevant patents. These serve a legal role similar to that of property markers at the edge of a land holding.
CHAPTER 4: THINGS GET MORE COMPLICATED
1. This discussion is based primarily on Ernest Braun and Stuart MacDonald, Revolution in Miniature: The History and Impact of Semiconductor Electronics Re-explored in an Updated and Revised Second Edition (New York: Cambridge University Press, 1982); and Leslie R. Berlin, “Robert Noyce and Fairchild Semiconductor, 1957–1968,” Business History Review 75 (2001): 63–101.
2. For a study of spawning in medical devices, see Aaron K. Chatterji, “Spawned with a Silver Spoon? Entrepreneurial Performance and Innovation in the Medical Device Industry,” Strategic Management Journal (forthcoming); for a discussion of Recruit, see Josh Lerner, Lee Branstetter, and Takeshi Nakabayashi, “New Business Investment Company: October 1997,” Harvard Business School Case (1999): no. 9-299-025.
3. For a discussion of the benefits that deal-sharing can bring, see Josh Lerner, “The Syndication of Venture Capital Investments,” Financial Management 23 (1994): 16–27.
4. These calculations are the author’s. The database on which these calculations are based is described in Josh Lerner, Antoinette Schoar, and Wan Wongsunwai, “Smart Institutions, Foolish Choices: The Limited Partner Performance Puzzle,” Journal of Finance 62 (2007): 731–64.
5. Liles, Venture Capital Firm, 83.
6. See the review in R. Glenn Hubbard, “Capital-Market Imperfections and Investment,” Journal of Economic Literature 36 (1998): 193–225. Regarding the impact of capital constraints on investments in innovation, particularly helpful articles are Bronwyn H. Hall, “Invest ment and Research and Development: Does the Source of Financing Matter?” Working Paper No. 92-194, Department of Economics, University of California at Berkeley, 1992; Kenneth Y. Hao and Adam B. Jaffe, “Effect of Liquidity on Firms’ R&D Spending,” Economics of Innovation and New Technology 2 (1993): 275–82; and Charles P. Himmelberg and Bruce C. Petersen, “R&D and Internal Finance: A Panel Study of Small Firms in High-Tech Industries,” Review of Economics and Statistics 76 (1994): 38–51.
7. Unless otherwise noted, numbers in this paragraph are taken from various yearbooks and the web site of the National Venture Capital Association.
8. U.S. Small Business Administration, The Small Business Economy (Washington, D.C.: Government Printing Office, 2007).
9. For an overview of the literature on herding by institutions, see Andrea Devenow and Ivo Welch, “Rational Herding in Financial Economics,” European Economic Review 40 (1996): 603–15.
10. For a discussion of this argument, see David De Meza, “Overlending,” Economic Journal 112 (2002): F17–F31.
11. See, for instance, Adam B. Jaffe, Economic Analysis of Research Spillovers—Implications for the Advanced Technology Program (Washington, D.C.: Advanced Technology Program, National Institute of Standards and Technology, U.S. Department of Commerce, 1996).
12. Zvi Griliches, “The Search for R&D Spillovers,” Scandinavian Journal of Economics 94 (1992): S29–S47.
13. See, for instance, Jewkes, Sawers, and Stillerman, The Sources of Invention, and Edwin Mansfield, John Rapoport, Anthony Romeo, Samuel Wagner, and George Beardsley, “Social and Private Rates of Return from Industrial Innovations,” Quarterly Journal of Economics 91 (1977): 221–40.
14. Douglass North, Growth and Structural Change (New York: Norton, 1981).
15. See, for instance, Alberto Alesina, Reza Baqir, and William Easterly, “Public Goods and Ethnic Divisions,” working paper, Harvard University, 1997; and William Easterly and Ross Levine, “Africa’s Growth Tragedy: Policies and Ethnic Divisions,” Quarterly Journal of Economics 112 (1997): 1203–50.
16. For the classic paper in this literature, see Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W. Vishny, “Law and Finance,” Journal of Political Economy 106 (1998): 1113–55.
17. Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W. Vishny, “The Quality of Government,” Journal of Law, Economics and Organization 15 (2000): 222–79.
18. This account is based in part on Eli Noam, “Telecommunications in Transition,” in Changing the Rules: Technological Change, International Competition, and Regulation in Telecommunications, ed. Robert W. Crandall and Kenneth Flamm (Washington, D.C.: Brookings Institution Press, 1989); and Victoria Shan non, “Bull S.A., the Computer Company, Aims to Emerge from Dependence on France,” New York Times, August 25, 2003.
19. For more about the Taiwanese incentive programs, see Kenneth L. Kraemer, Jason Dedrick, Chin-Yeong Hwang, Tze-Chen Tu, and Chee-Sing Yap, “Entrepreneurship, Flexibility, and Policy Coordination: Taiwan’s Computer Industry,” Information Society 12 (1996): 215–49; and Fu-Lai T. Yu, Ho-Don Yan, and Shen-Yu Chen, “Adaptive Entrepreneurship and Taiwan’s Economic Dynamics,” Laissez-Faire (Universidad Francisco Marroquin) 24–25 (2006): 57–74.
20. See, for instance, Peter Gwynne, “Brittany Positions Itself to Attract Telecom R&D,” Research and Development 38:9 (1996): 34–35; Roland de Penanros and Claude Serfati, “Regional Conversion under Conditions of Defense Industry Centralization: The French Case,” International Regional Science Review 23:1 (2000): 66–80; and Organisation for Economic Cooperation and Development, OECD Territorial Reviews: France (Paris: OECD, 2006).
21. See, for instance, OECD, OECD Territorial Reviews: France, 46.
22. Ibid., 120.
23. This account is primarily drawn from Carol Leoning, “Housing Grants Misused Audit Says,” Washington Post, May 9, 2000; Resources, Community and Economic Development Division, General Accounting Office, Inventory of Self-Sufficiency and Economic Opportunity Programs (Washington, D.C.: GAO, July 28, 1997); and Saundra Elion, “Tenant Opportunity Program Grantees, District of Columbia Housing Authority,” Audit Report Office of Inspector General (U.S. Department of Housing and Urban Development, March 20, 2000).
24. Leoning, “Housing Grants Misused.”
25. This account is drawn from James A. White, “Picking Losers: Back-Yard Investing Yields Big Losses, Roils Kansas Pension System—but Idea of Using Such Funds to Help Local Industries Still Intrigues Politicians—Now a Steel Mill Is Sitting Idle,” Wall Street Journal, August 21, 1991; John Hanna, “KPERS Attorneys Place Damages from Investments at $524 Million,” Associated Press, September 17, 1997; and John Hanna, “Litigation over KPERS Losses Ends after 13 years,” Associated Press, September 12, 2003.
26. Figures 4.1 and 4.2 are compiled from the databases of VentureXpert.
27. An excellent review of these programs, including the Danish experience, is in two publications by the Organisation for Economic Cooperation and Development, Promoting Entrepreneurship and Innovative SMEs in a Global Economy: Towards a More Responsible and Inclusive Globalisation (Paris: OECD, 2004), and Government Venture Capital for Technology-Based Firms (Paris: OECD, 1997).
28. Claire Lelarge, David Sraer, and David Thesmar, “Entrepreneurship and Credit Constraints: Evidence from a French Loan Guarantee Program,” in International Differences in Entrepreneurship, ed. Josh Lerner and Antoinette Schoar (Chicago: University of Chicago Press, forthcoming).
29. The articulation of this model in the economics literature is frequently attributed to Mancur Olson, The Logic of Collective Action (Cambridge: Harvard University Press, 1965); and George Stigler, “The Economic Theory of Regulation,” Bell Journal of Economics 2 (1971): 3–21; its formal modeling to Sam Peltzman, “Towards a More General Theory of Regulation,” Journal of Law and Economics 19 (1976): 211–40; and Gary S. Becker, “A Theory of Competition among Pressure Groups for Political Influence,” Quarterly Journal of Economics 98 (1983): 371–400.
30. Megan Woolhouse, “$1 Billion Life-Sciences Bill Passes Senate,” Boston Globe, June 13, 2008.
31. See the data in BHI Policy Study, Police Details in Massachusetts: Protection or Perk? (Boston: Beacon Hill Institute for Public Policy Research, Suffolk University, 2004).
32. See William J. Baumol, “Entrepreneurship: Productive, Unproductive, and Destructive,” Journal of Political Economy 98 (1990): 893–921; and Kevin M. Murphy, Andrei Shleifer, and Robert W. Vishny, “The Allocation of Talent: Implications for Growth,” Quarterly Journal of Economics 106 (1991): 503–30.
33. These evaluations are Xulia González, Jordi Jaumandreu, and Consuelo Pazó, “Barriers to Innovation and Subsidy Effectiveness,” RAND Journal of Economics 36 (2005): 930–50; and Saul Lach, “Do R&D Subsidies Stimulate or Displace Private R&D? Evidence from Israel,” Journal of Industrial Economics 50 (2002): 369–90.
34. This account is drawn from “$158 Million for Building on IT Strengths (BITS),” press release, Ministry for Communications, Information Technology and the Arts, Government of Australia, June 20, 1999; Econtech Pty Ltd, Evaluation and Future of the BITS Incubator Program (Canberra: Econtech 2003); Organisation for Economic Cooperation and Development, “Australia,” http://www.oecd.org/dataoecd/9/7/1952416.pdf (accessed August 9, 2008); Austrade, “Government Funding Programs for Australian ICT Companies,” http://www.austradeict.gov.au/default.aspx?ArticleID=2930#BITS (accessed August 9, 2008); and James Riley and Simon Hayes, “Incubators Toss ‘Good Money after Bad’—Most of the Funding Spent on Management Fees and Advice,” Australian, June 8, 2004.
35. Richard Alston, Minster for Communications, Information Technology and the Arts, “Alston Launches $78 Million Program to Assist IT&T Industries,” media release, November 29, 1999, http://www.richardalston.dcita.gov.au/Article/0,,0_4-2_4008-4_14651,00.html (accessed January 27, 2009).
36. “Incubators Doing Their Bit,” press release, Ministry for Communications, Information Technology and the Arts, June 2, 2004.
CHAPTER 5: THE NEGLECTED ART OF SETTING THE TABLE
1. This discussion is drawn from, among other sources, Garry Bruton, David Ahlstrom, and Kulwant Singh, “The Impact of the Institutional Environment on the Venture Capital Industry in Singapore,” Venture Capital 4:3 (2002): 197–218; David Lammers, “Singapore Seeks High Profile Role in Chip Design,” Electronic Engineering Times 1342 (October 11, 2004): 34; and Sandy Oh, “Giving Singapore a Silicon Valley Mindset,” Business Week Online, http://www.businessweek.com/smallbiz/0008/an000811.htm (accessed October 23, 2008).
2. This tabulation is drawn from a large number of government web sites, as well as Francis C. C. Koh and Winston T. H. Koh, “Venture Capital and Economic Growth in Singapore,” Singapore Management University working paper (2002) no. 21-2002; and conversations with Yinglan Tan.
3. Readers familiar with Singapore’s structured society might wonder about the effectiveness of such efforts to introduce creativity.
4. This account has drawn upon Wayne Arnold, “Science Haven in Singapore; Luring Top Stem Cell Researchers with Financing and Freedom,” New York Times, August 17, 2006; Paul Smaglik, “Singapore: Filling Biopolis,” Nature 425 (2003): 746–47; and Michael Frith, “Sprawling Biopolis Jazzes Up Singapore’s Science Scene,” Nature Medicine 9 (2003): 1440.
5. See, for instance, Yukata Imai and Masaaki Kawagoe, “Business Start-Ups in Japan: Problems and Policies,” Oxford Review of Economic Policy 16:2 (2000): 114–23.
6. Ronald J. Gilson, “Engineering a Venture Capital Market: Lessons from the American Experience,” Stanford Law Review 55 (2003): 1067–1103.
7. Gilson’s account is drawn from Ralf Becker and Thomas Hellmann, “The Genesis of Venture Capital—Lessons from the German Experience,” in Venture Capital, Entrepreneurship, and Public Policy, ed. Vesa Kanniainen and Christian Keuschnigg (Cambridge: MIT Press, 2004), 33–67.
8. This discussion is drawn from Josh Lerner and Antoinette Schoar, “Does Legal Enforcement Affect Financial Transactions? The Contractual Channel in Private Equity,” Quarterly Journal of Economics 120 (2005): 223–46.
9. “Innovation’s Golden Goose,” Economist 365:8303 (December 12, 2002): 3.
10. See, for instance, David C. Mowery, Richard R. Nelson, Bhaven N. Sampat, and Arvids A. Ziedonis, Ivory Tower and Industrial Innovation: University-Industry Technology Transfer before and after the Bayh-Dole Act (Stanford: Stanford University Press, 2004).
11. See Josh Lerner, “Venture Capital and the Commercialization of Academic Technology: Symbiosis and Paradox,” in Industrializing Knowledge: University-Industry Linkages in Japan and the United States, ed. Lewis M. Branscomb (Cambridge: MIT Press, 1999), 385–409.
12. This account is based on Seragen’s filings with the U.S. Securities and Exchange Commission. In a 1992 agreement with the State of Massachusetts’ Attorney General’s Office, the university agreed to make no further equity investments. The school, however, made a $12 million loan guarantee in 1995 (subsequently converted into equity) and a $5 million payment as part of an asset purchase in 1997.
13. Josh Lerner, “ARCH Venture Partners: November 1993,” Harvard Business School Case (1995): no. 9-295-105.
14. See Gompers, Lerner, and Scharfstein, “Entrepreneurial Spawning.”
15. James M. Poterba, “Venture Capital and Capital Gains Taxation,” in Tax Policy and the Economy, ed. Lawrence H. Summers, 3 (1989): 47–67.
16. Paul A. Gompers and Josh Lerner, “What Drives Venture Capital Fund-Raising?” Brookings Papers on Economic Activity: Microeconomics (1998): 149–92.
17. See, for instance, John Armour and Douglas Cumming, “The Legal Road to Replicating Silicon Valley,” working paper, Economic and Social Research Council, Centre for Business Research, 2001.
18. Organisation for Economic Cooperation and Development,” Venture Capital Policy Review: United Kingdom, STI Working Paper 2003/1 (Paris: OECD, 2003).
19. See the international evidence, for instance, in Leslie A. Jeng and Philippe C. Wells, “The Determinants of Venture Capital Funding: Evidence across Countries.” Journal of Corporate Finance 6 (2000): 241–89, which highlights the extent to which labor market rigidities can deter venture capital investment.
20. These estimates are from Thomas Åstebro and Irwin Bernhardt, “The Social Rate of Return to Canada’s Inventor’s Assistance Program,” Engineering Economist 44 (1999): 348–61.
21. Ibid.; and Thomas Åstebro, “Profitable Advice: The Value of Information Provided by Canada’s Inventor’s Assistance Program,” Economics of Innovation and New Technology 10 (2001): 45–72.
22. Dean S. Karlan and Martin Valdivia, “Teaching Entrepreneurship: Impact of Business Training on Microfinance Clients and Institutions,” discussion paper, Economic Growth Center, Yale University (2006): no. 941. For an overview of other works, see J. Bennet and M. M. Banerjee, “Light at the End of the Tunnel: Using Qualitative Research to Evaluate Micro-Entrepreneurial Training Programs,” working paper, Center for Women and Enterprise, 1999.
23. New Zealand Venture Investment Fund, Progress and Achievement Report: 2003/04 (Auckland: NZVIF, 2004).
24. Josh Lerner, David Moore, and Stuart Shepherd, A Study of New Zealand’s Venture Capital Market and Implications for Public Policy: A Report to the Ministry of Research Science and Technology (Auckland: LECG, 2005).
25. This point was originally made by Bernard S. Black and Ronald J. Gilson, “Venture Capital and the Structure of Capital Markets: Banks versus Stock Markets,” Journal of Financial Economics 47 (1998): 243–77.
26. These facts are from the Bombay Stock Exchange web page, http://www.bseindia.com/ (accessed September 14, 2008).
27. These facts are drawn from Felda Hardymon and Ann Leamon, “Motilal Oswal Financial Services—an IPO in India,” Harvard Business School Case (2007): no. 9-807-095; and Lily Fang and Roger Leeds, “Warburg Pincus and Bharti Tele-Ventures,” in The Globalization of Alternative Investments: Working Papers, ed. Anuradha Gurung and Josh Lerner (Geneva: World Economic Forum, 2008), 151–63.
28. Jeng and Wells, “Determinants of Venture Capital Funding.”
29. The information in this paragraph is drawn from Graham Bannock and Partners, European Second-Tier Markets for NTBFs (London: Graham Bannock and Partners, 1994).
30. This history of the EASDAQ market is drawn from Josh Lerner, “European Association of Securities Dealers: November 1994,” Harvard Business School Case (1995): no. 9-295-116.
31. Reena Aggarwal and James J. Angel, “The Rise and Fall of the Amex Emerging Company Marketplace,” Journal of Financial Economics 52:2 (1999): 257–89.
32. This fact is taken from Ramana Nanda and Tarun Khanna, “Diasporas and Domestic Entrepreneurs: Evidence from the Indian Software Industry,” working paper, Harvard University, 2007.
33. AnnaLee Saxenian, Local and Global Networks of Immigrant Professionals in Silicon Valley (San Francisco: Public Policy Institute of California, 2002).
34. Nanda and Khanna, “Diasporas and Domestic Entrepreneurs.”
35. “Plans for Asia’s Silicon Valley,” Australian, November 27, 2001.
CHAPTER 6: HOW GOVERNMENTS GO WRONG: BAD DESIGNS
1. B. Ramasamy, A. Chakrabarty, and M. Cheah, “Malaysia’s Leap into the Future: An Evaluation of the Multimedia Super Corridor,” Technovation 24 (November 2004): 871–83.
2. Roziana Hamsawi, “Adviser—Need to Create an Innovative Work Culture,” Business Times, September 28, 1999.
3. This account draws on, among other sources, Cris Prystay, “Malaysia Is Banking on Bio Valley Plans,” Asian Wall Street Journal, November 19, 2001; National Biotechnology and Bioinformatics Network, “Future Plan: Introduction,” http://www.nbbnet.gov.my/plan.htm (accessed August 5, 2008); “Commercial Initiative for Malaysia’s BioValley,” Hong Kong Trade Development Council, unpublished document, June 2004; Datuk Leong Ah Hin, “BioValley as It Was Envisioned,” New Straits Times, April 20, 2005; David Cyranoski, “Malaysia Puts Biovalley Under Wraps” Nature 424 (2003): 118; and “Malaysian Biotechnology: The Valley of Ghosts,” Nature 436 (2005): 620–21.
4. Carol Murugiah, “All States to Establish ‘Bio-Valley’ Hubs by 2006,” New Straits Times, September 28, 2003.
5. This account is drawn from, among other sources, Jonathan Kent, “Reviving Malaysia’s Hi-Tech Dreams,” BBC News, June 8, 2006; “Amica Sues Govt US$200M, President Appeals for PM’s Intervention,” Bernama Daily Malaysian News, January 19, 2006; and Oxford Business Group, “New Technology Blues: Malaysia,” http://www.oxfordbusinessgroup.com/weekly01.asp?id=1785 (accessed August 8, 2008).
6. “Net Value: Reviving MTDC,” Edge Malaysia, July 20, 2004.
7. Scott Wallsten, “The Role of Government in Regional Technology Development: The Effects of Public Venture Capital and Science Parks,” Stanford Institute for Economic Policy Research Discussion Paper (2001): no. 00-39.
8. Michael I. Luger and Harvey A. Gildstein, Technology in the Garden: Research Parks and Regional Economic Development (Chapel Hill: University of North Carolina Press, 1991), 71.
9. This account is drawn from Markku Maula and Gordon Murray, Finnish Industry Investment Ltd: An International Evaluation (Helsinki: Ministry of Trade and Industry, Government of Finland, 2003); and Reijo Vihko, et al., Evaluation of Sitra, 2002 (Helsinki: Sitra, 2002).
10. This paragraph is based on Peter K. Eisinger, “The State of State Venture Capitalism,” Economic Development Quarterly 5 (1991): 64–76; and Peter K. Eisinger, “State Venture Capitalism, State Politics, and the World of High-Risk Investment,” Economic Development Quarterly 7 (1993): 131–39.
11. The discussion of the European Seed Capital Fund Program is drawn from Gordon Murray, “The European Union’s Support for New Technology-Based Firms: An Assessment of the First Three Years of the European Seed Capital Fund Program,” European Planning Studies 2 (1994): 435–61.
12. See Andrew Carragher and Darren Kelly, “A Comparison of the Canadian and American Private Equity Markets,” Journal of Private Equity 1 (1998): 23–39; Organisation for Economic Cooperation and Development, Venture Capital Policy Review: Canada, STI Working Paper (Paris: OECD, 2003): no. 2003/4; and Daniel Sandler, Venture Capital and Tax Incentives: A Comparative Study of Canada and the United States (Toronto: Canadian Tax Foundation, 2004).
13. This account is based on, among other sources, Katrina Onstad, “Nothing Ventured, Tax Break Gained,” Canadian Business 70:11 (1997): 47–52; Canadian Auto Workers, Labour-Sponsored Funds: Examining the Evidence (Toronto: CAW Research Department, 1999).
14. The statistics in this paragraph are from Douglas Cummings and Jeffrey MacIntosh. “Crowding Out Private Equity: Canadian Evidence,” Journal of Business Venturing 21 (2006): 569–609.
15. Ibid.
16. “Government Sponsored Venture Capital in Canada: Effects on Value Creation, Competition and Innovation,” working paper, University of British Columbia, 2008.
17. This figure is compiled from various publications and web sites of the Canadian, European, Israeli, and U.S. (National) venture capital associations, as well as those of the Asian Venture Capital Journal. In some nations where venture capital investments are not clearly delineated, I employ seed and start-up investments. The GDP data are from the Central Intelligence Agency, 2008 World Factbook.
18. SDC Thomson, “VentureXpert,” http://vx.thomsonib.com/NA-SApp/VxComponent/VXMain.jsp (accessed July 5, 2008).
19. Wim Borgdorff, “Public Money Is Harming the VC Industry,” Financial Times, February 16, 2004.
20. Marco Da Rin, Giovanna Nicodano, and Alessandro Sembenelli, “Public Policy and Creation of Active Venture Capital Markets,” Journal of Public Economics 90 (2006): 1699–1723.
21. See, for instance, the history of the Victorian Economic Development Corporation in Australia in Christopher C. Golis, Enterprise and Venture Capital: A Business Builder’s and Investor’s Handbook (London: Allen and Unwin, 2002).
22. Amar Bhidé, The Origin and Evolution of New Businesses (New York: Oxford University Press, 2000).
23. Paul A. Gompers and Josh Lerner, Capital Formation and Investment in Venture Markets: A Report to the NBER and the Advanced Technology Program, Report GCR-99-784 (Washington, D.C.: Advanced Technology Program, National Institutes of Standards and Technology, U.S. Department of Commerce, 1999).
24. This account is based on, among other sources, Donna Block, “The Venture Trap,” Deal Newsweekly 4:40 (October 30, 2006): 39; House Committee on Small Business, Full Committee Hearing on “Legislation to Reauthorize the Small Business Innovation Research (SBIR) Program,” March 13, 2008; and David T. Ralston Jr. and Stephen B. Maebius, “SBA Regulatory Change Enhances the SBIR Program and Provides New Investment Opportunities for Venture Capital Firms in SBIR Participants,” in Legal News: Nanotechnology (Boston: Foley and Lardner, 2005).
25. American Small Business League, “Obama May Support Venture Capitalists’ Move to Dominate Government Small Business Programs,” http://www.asbl.com/showmedia.php?id=1272 (accessed May 1, 2009).
26. Statement of Mark G. Heesen, President, National Venture Capital Association, House Committee on Small Business, “Legislation to Reauthorize.”
27. This figure is based on the data in Josh Lerner, “The Government as Venture Capitalist: The Long-Run Effects of the SBIR Program,” Journal of Business 72 (1999): 285–318.
28. See Maryann P. Feldman and Johanna L. Francis, “Fortune Favors the Prepared Region: The Case of Entrepreneurship and the Capitol Region Biotechnology Cluster,” European Planning Studies 11 (2003): 765–88.
29. See, for instance, the saga of Cleveland’s biotechnology initiative as related in Michael Fogarty and Amit Sinha, “Why Older Industrial Regions Can’t Generalize from Route 128 and Silicon Valley: University-Industry Relationships and Regional Innovation Systems,” in Branscomb, Industrializing Knowledge, 473–509.
30. Lynne G. Zucker, Michael R. Darby, and Marilyn B. Brewer, “Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises,” American Economic Review 88 (1998): 290–306.
31. For a discussion, see, for instance, Kenneth L. Kraemer, “Entrepreneurship, Flexibility, and Policy Coordination: Taiwan’s Computer Industry,” Information Society 12 (1996): 215–49; and Carol Yeh-Yun Lin, “Success Factors of Small- and Medium-Sized Enterprises in Taiwan,” Journal of Small Business Management 36:4 (1998): 43–56.
32. For a detailed history and analysis of the program, see Lerner, Moore, and Shepherd, New Zealand’s Venture Capital Market.
CHAPTER 7: HOW GOVERNMENTS GO WRONG: BAD IMPLEMENTATION
1. This account is drawn from Discovery Fund, “What Is Discovery Fund?” www.discovery-fund.com (accessed August 9, 2008); Judith Messina, “Misadventures of a Venture Fund: After Three Years, Big Apple Investment Can’t Point to Much,” Investment News, posted at http://www.investmentnews.com/apps/pbcs.dll/article?AID=/19980511/SUB/805110736/1009/TOC&ht= (accessed October 24, 2008); Michael Brick, “Business; Venture (Widely) Forth with City Hall Capital,” New York Times, May 30, 1999; Matthew Flamm, “Gaining New Focus from Losses: Discovery Fund Ventures Near Home,” Crain’s New York Business 17 (April 23, 2001): 26.
2. Michael Selz, “Post Mortem: Leadership, Too Late—Pseudo Programs Spent a Lot of Its Venture Capital before Seasoned Management Arrived,” Wall Street Journal, November 27, 2000.
3. Brick, “Business; Venture (Widely) Forth.”
4. This account is based on “Iowa Suit Tests LPs’ Authority to Abolish Fund,” Private Equity Analyst 4 (1994): 1, 9.
5. See the discussion in David L. Barkley, Deborah M. Markey, and Julia Sass Rubin, “Certified Capital Companies (CAPCOs): Strengths and Shortcomings of the Latest Wave in State-Assisted Venture Capital Programs,” Economic Development Quarterly 15 (2001): 350–66.
6. Lerner, Schoar, and Wongsunwai, “Smart Institutions, Foolish Choices.” The results discussed here are from the National Bureau of Economic Research working paper, which used a larger sample than the published paper.
7. This discussion is drawn from Paul A. Gompers and Josh Lerner, The Money of Invention (Boston: Harvard Business School Press, 2001).
8. This account of Celltech’s history is drawn from, among other sources, David Dickson, “Boom Time for British Technology?” Science 224:4645 (April 13, 1984): 136–38; Erik Ipsen, “Celltech Refuels Europe’s Biotech Dream,” International Herald Tribune, November 9, 1993; and Peter Mitchell, “Celltech Acquisition Sends Mixed Messages,” Nature Biotechnology 22 (2004): 787.
9. Vanessa Maybeck and William Bains, “Small Company Mergers—Good for Whom?” Nature Biotechnology 24 (2006): 1343–48.
10. See the discussion, for instance, in Miguel Helft, “A Kink in Venture Capital’s Gold Chain,” New York Times, October 7, 2006.
11. “Testimony of William F. Dunbar,” Subcommittee on Government Programs, Committee on Small Business, U.S. House of Representatives, “Venture Capital Marketing Association Charter Act,” April 18, 1996. For other discussions of this proposal, see also White House Conference on Small Business, The 60 Recommendations (Washington, D.C.: Office of Advocacy of the U.S. Small Business Administration, 1996); and Division of Corporation Finance, U.S. Securities and Exchange Commission, “Final Report of the SEC Government-Business Forum on Small Business Capital Formation,” June 1997.
12. For a review of the institutional challenges associated with state-sponsored Chinese venture funds and the failure to undertake evaluations, see Dai Zhi-min and Yu Jin-jin, “On the Institutional Defect and Its Correction of Venture Capital in China,” Journal of Zhejiang University (SCIENCE) 2:4 (2001): 462–66.
13. “Israeli Government to Sell Off Venture Capital Fund,” Reuters, October 9, 1996.
14. See, for instance, Charles W. Wessner, ed., The Small Business Innovation Research Program: An Assessment of the Department of Defense Fast Tract Initiative (Washington, D.C.: Board on Science, Technology, and Economic Policy, Policy Division, National Research Council, 2000).
15. This problem was first identified by Linda R. Cohen and Roger G. Noll, eds., The Technology Pork Barrel (Washington, D.C.: Brookings Institution, 1991); and Scott J. Wallsten, “The Effects of Government-Industry R&D Programs on Private R&D: The Case of the Small Business Innovation Research Program,” RAND Journal of Economics 31 (2000): 82–100.
16. Gompers and Lerner, Capital Formation and Investment.
17. Morten T. Hansen, Nitin Nohria, and Jeffrey A. Berger, The State of the Incubator Marketspace, Harvard Business Review Report (Boston: Harvard Business School Publishing, 2000): no. 4797.
18. See the discussion in Adam B. Jaffe, “Building Program Evaluation into the Design of Public Research Support Programs,” Oxford Review of Economic Policy 18 (2002): 22–34, 33.
19. This account is drawn from, among other sources, Daniel Roth, “Catch Us If You Can,” Fortune 149:3 (February 9, 2004): 65–74; and Adam Lashinsky, “Venture Capital Is Not for Girlie Men,” Fortune 152:8 (October 17, 2005): 38.
20. These statistics are taken from various yearbooks of the European Venture Capital Association.
21. The discussion of Yozma is based on Gil Avnimelech, Martin Kenney, and Morris Teubal, “Building Venture Capital Industries: Understanding the U.S. and Israeli Experiences,” BRIE Working Paper (2004): no. 160; Organisation for Economic Cooperation and Development, Venture Capital Policy Review: Israel, STI Working Paper (Paris: OECD, 2003): no. 2003/3; and Manuel Trajtenberg, “Government Support for Commercial R&D: Lessons from the Israeli Experience,” Innovation Policy and the Economy 2 (2002): 79–134.
22. Jerusalem Institute of Management, Export-Led Growth Strategy for Israel (Jerusalem: Jerusalem Institute of Management and the Telesis Group, 1987).
23. Yigdal Erlich, “The Yozma Group—Policy and Success Factors,” http://www.insme.org/documenti/Yozma_presentation.pdf (accessed July 5, 2008).
24. This discussion of the Japanese case is based on Lerner, Branstetter, and Nakabayashi, “New Business Investment Company,” and the sources cited therein.
25. See AusIndustry, “Fact Sheet: Venture Capital Limited Partnerships,” http://www.ausindustry.gov.au/library/Fact_Sheet_VCLP_FINAL_Jan0820080115044831.pdf (accessed July 13, 2008); and Josh Lerner and Brian Watson, “The Public Venture Capital Challenge: The Australian Case,” Venture Capital 10 (2008): 1–20.
26. Christian Keuschnigg, “Optimal Public Policy for Venture Capital Backed Innovation,” working paper series, Department of Economics, University of St. Gallen (2005): no. 2003-09. For an interesting discussion of the policies implications of this and related papers (which I found very helpful in writing this section), see Andrew Gawith, Adolf Stroombergen, and David Grimmond, New Zealand’s Angel Capital Market: The Supply Side (Wellington, New Zealand: Infometrics, 2004), appendix III.
CHAPTER 8. THE SPECIAL CHALLENGES OF SOVEREIGN FUNDS
1. These tables are based on, among other sources, Private Equity Intelligence, Preqin Sovereign Wealth Fund Review (London: Preqin, 2008); David G. Fernandez and Brenhard Eschweiler, Sovereign Wealth Funds: A Bottom-Up Primer (Singapore: JPMorgan Research, 2008); and the author’s analyses.
2. Fernandez and Eschweiler, Sovereign Wealth Funds.
3. See, for instance, Stephen Jen, How Big Could Sovereign Wealth Funds Be by 2015? (New York: Morgan Stanley Research—Global, 2007).
4. This account is based on, among other sources, Private Equity Intelligence, Sovereign Wealth Fund Review.
5. This account, among other sources, is drawn from Kyle Pope, “Uneasy Boom: Norway’s Oil Bonanza Stirs Fears of a Future When Wells Run Dry—as Output Climbs, Many Say Money Is Being Wasted and a Slump Lies Ahead—a Town’s Varying Fortunes,” Wall Street Journal, October 3, 1995; and Svein Gjedrem, “The Management of Petroleum Wealth,” lecture at the Polytechnic Association, November 8, 2005.
6. Quoted in David S. Landes, The Wealth and Poverty Of Nations: Why Some Are So Rich and Some So Poor (New York: Norton, 1998), 172.
7. American Economic Review Papers and Proceedings 82:2 (May 1997): 178–83.
8. For an overview of these issues, see Jeffrey D. Sachs and Andrew M. Warner, “The Curse of Natural Resources,” European Economic Review 45 (May 2001): 827–38.
9. Lawrence Summers, “Funds That Shake Capitalist Logic,” Financial Times, July 29, 2007.
10. William Miracky, Davis Dyer, Drosten Fisher, Tony Goldner, Loic Lagarde, and Vicente Piedrahita, Assessing the Risks: The Behaviors of Sovereign Wealth Funds in the Global Economy (Boston: Monitor Group, 2008).
11. “Bogus Backlash: Attacks by a Leading German Politician on Investors Have Been Hysterical and Misguided,” Economist 375:8425 (May 7, 2005): 12–13.
12. These results are reported in Steven Davis, John Haltiwanger, Ron Jarmin, Josh Lerner, and Javier Miranda,, “Private Equity and Employment,” unpublished working paper, University of Chicago, University of Maryland, U.S. Bureau of the Census, and Harvard University, 2008; and Josh Lerner, Morten Sorenson, and Per Stromberg, “Private Equity and Long-Run Investment: The Case of Innovation,” working paper, Harvard University, Columbia University, and Swedish Institute for Financial Research, 2008.
13. These accounts are from, among other sources, Mark Landler, “Selling Oil Is Easier Than Investing Ethically, Norway Funds,” International Herald Tribune, May 2, 2007; and “Asset-Backed Insecurity,” Economist 386:8563 (January 19, 2008): 78–80.
14. Josh Lerner, Antoinette Schoar, and Jialan Wang, “The Secrets of the Academy: The Drivers of University Endowment Success,” Journal of Economic Perspectives 22:3 (2008): 207–22.
15. Paul Gompers and Josh Lerner, “Money Chasing Deals? The Impact of Fund Inflows on Private Equity Valuation,” Journal of Financial Economics 55:2 (2000): 281–25.
16. This account is drawn from “Manifold Effects of Hard Times,” Time, December 9, 1974, 40–41; and Christopher Shea, “U. of Rochester to Cut Programs, Faculty, and Enrollment,” Chronicle of Higher Education 42:16 (1995); A33; and personal conversations.
17. This account is based on Kevin Book, Felda Hardymon, Ann Leamon, and Josh Lerner, “In-Q-Tel,” Harvard Business School Case (2005): no. 9-804-146; Business Executives for National Security, Accelerating the Acquisition and Implementation of New Technologies for Intelligence: The Report of the Independent Panel on the Central Intelligence Agency In-Q-Tel Venture (Washington, D.C.: BNES, 2001); and assorted press accounts.
18. Book et al., “In-Q-Tel,” 11.
19. These quotes are drawn from one of several pieces on In-Q-Tel done by the paper: Christopher Byron, “Penny Stock Spies,” New York Post, April 25, 2005.
20. This account draws on, among other sources, Annika Sundén, “The Swedish NDC Pension Reform,” Annals of Public and Cooperative Economics 69 (1998): 571–83; and Karen M. Anderson, “Pension Politics in Three Small States: Denmark, Sweden and the Netherlands,” Canadian Journal of Sociolog 29:2 (2004): 289–312.
21. Government of Singapore Investment Corporation, “Structure,” http://www.gic.com.sg/aboutus_structure.htm (accessed July 24, 2008).