Crowdingoutprivateequitycanadaian(正式发表论文word版本).doc

Crowding out private equity: Canadian evidence Douglas J. Cumminga, , , and Jeffrey G. MacIntoshb, 1 aSeverino Center for Technological Entrepreneurship, Lally School of Management and Technology, Rensselaer Polytechnic Institute, 110-8th Street, Troy, NY 12180, USAbToronto Stock Exchange Professor of Capital Markets, Faculty of Law, University of Toronto, 78 Queens Park, Toronto, Ontario, Canada M5S 2C5 Received 1 March 2004;? revised 1 March 2005;? accepted 1 June 2005.? Available online 6 March 2006.  Abstract In this paper, we examine a Canadian tax-driven venture capital vehicle known as the “Labour Sponsored Venture Capital Corporation” (LSVCC). As a theoretical matter, we suggest that the LSVCCs can be expected to have higher agency costs and lower profitability than private venture capital funds. We present data that is consistent with this view. The central question that we analyze, however, is whether the tax advantages conferred on LSVCCs have resulted in LSVCCs “crowding out,” or displacing other types of venture capital funds. Empirical analysis of our data (which covers the 1977–2001 period) is highly consistent with crowding out. The data suggest that crowding out has been sufficiently energetic as to lead to a reduction in the aggregate pool of venture capital in Canada, frustrating one of the key governmental goals underlying the LSVCC programs; namely, the expansion of the aggregate pool of capital. In the course of our analysis, we confirm the importance of macroeconomic factors (the performance of the stock market, real interest rates, and changes in real gross domestic product) in affecting the supply of and demand for venture capital. We also generate evidence that is consistent with the proposition that entrepreneurs in the market for venture capital prefer to incorporate their businesses federally, rather than provincially. Keywords: Venture capital cycle; Government sponsorship; Tax; Crowding out JEL classification codes: G24; G28; G