Taiwan's Venture Capital: Policies and Impacts
Taiwan's Venture Capital: Policies and Impacts
Lee-Rong Wang
Associate Research Fellow
Chung-Hua Institution for Economic Research
June 20, 1995
Abstract
This paper investigates Taiwan's venture capital (VC) policies and the overall impact of VC on Taiwan's economy. We find that the government of Taiwan, like those of Singapore and South Korea, has been actively involved in encouraging domestic VC. The effects of the government's VC policies in Taiwan are apparent not only in the multiplier effect, measured by an output/input ratio, but also in the composition of VC investments, which have come to focus much more on technology- intensive industries than have those in Japan or Hong Kong, where governments have made no special contribution to VC development. However, this paper also explores possible future alternatives to Taiwan's current VC policies.
An investigation of the impact of VC on Taiwan's economy is conducted via three methods and finds that Taiwan's VC enterprises performed better in the area of providing financial services than they did in the support of management and technology transfer.