Abstract

This paper investigates Taiwan's venture capital (VC) policies and the overall impact of VC on Taiwan's economy. 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.

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