Institutional Barriers to Financing Technology-based Small Firms through Venture Capital Mechanism: A Study to Explore the Incentives for Investment in Iran
<p>There is a consensus among scholars that access to financial sources is vital for Technology-Based Small Firms (TBSFs). Venture Capital (VC) financing is the most appropriate external financial source for them. However, VC industry is underdeveloped in most developing countries, e.g. Iran....
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| Format: | Article |
| Language: | English |
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EconJournals
2018-01-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/5821 |
| _version_ | 1797910837663367168 |
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| author | Motavaseli Mahmood Shojaei Saeed Bitaab Ali Hasti Chitsazan Chitsazan Hasti Ghanbar Mohammadi Elyasi |
| author_facet | Motavaseli Mahmood Shojaei Saeed Bitaab Ali Hasti Chitsazan Chitsazan Hasti Ghanbar Mohammadi Elyasi |
| author_sort | Motavaseli Mahmood |
| collection | DOAJ |
| description | <p>There is a consensus among scholars that access to financial sources is vital for Technology-Based Small Firms (TBSFs). Venture Capital (VC) financing is the most appropriate external financial source for them. However, VC industry is underdeveloped in most developing countries, e.g. Iran. This paper seeks to discover the causes for “lack of incentives for VC investment” based on institutional theory. In this regard, institutional obstacles constraining the incentives for VC investment in Iran were investigated through conducting 31 detailed interviews. The results suggest that the institutional set-up in Iran motivates the investment in tangible assets, short term projects, large investment schemes and intransparent project rather than TBSFs. Many institutional factors were identified which decrease the incentives for VC investment as: Information disclosure institutions, tax regulations, labor regulations, fiscal institutions, political institutions, commerce and competition regulation, property rights and financial market regulation. Finally, results are discussed and concluded in table 3.</p><p><strong>Keywords:</strong> Venture Capital, Technology-Based Small Firm, Incentives for investment.</p><p><strong>JEL Classifications: </strong>G24; G28; G31; G38; O31</p> |
| first_indexed | 2024-04-10T11:31:55Z |
| format | Article |
| id | doaj.art-4cbfc304f0714c6895aeff315055a1a2 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T11:31:55Z |
| publishDate | 2018-01-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-4cbfc304f0714c6895aeff315055a1a22023-02-15T16:18:05ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382018-01-01811841953121Institutional Barriers to Financing Technology-based Small Firms through Venture Capital Mechanism: A Study to Explore the Incentives for Investment in IranMotavaseli Mahmood0Shojaei Saeed1Bitaab Ali2Hasti Chitsazan3Chitsazan Hasti4Ghanbar Mohammadi ElyasiProfessor, faculty of economics, university of TehranPhD student, faculty of entrepreneurship management, university of Tehran,Faculty member, research institute for science, technology and industry policy, Sharif University of technologyAssistant Professor, faculty of entrepreneurship management, university of TehranAssociate Professor, faculty of entrepreneurship management, university of Tehran<p>There is a consensus among scholars that access to financial sources is vital for Technology-Based Small Firms (TBSFs). Venture Capital (VC) financing is the most appropriate external financial source for them. However, VC industry is underdeveloped in most developing countries, e.g. Iran. This paper seeks to discover the causes for “lack of incentives for VC investment” based on institutional theory. In this regard, institutional obstacles constraining the incentives for VC investment in Iran were investigated through conducting 31 detailed interviews. The results suggest that the institutional set-up in Iran motivates the investment in tangible assets, short term projects, large investment schemes and intransparent project rather than TBSFs. Many institutional factors were identified which decrease the incentives for VC investment as: Information disclosure institutions, tax regulations, labor regulations, fiscal institutions, political institutions, commerce and competition regulation, property rights and financial market regulation. Finally, results are discussed and concluded in table 3.</p><p><strong>Keywords:</strong> Venture Capital, Technology-Based Small Firm, Incentives for investment.</p><p><strong>JEL Classifications: </strong>G24; G28; G31; G38; O31</p>https://www.econjournals.com/index.php/ijefi/article/view/5821 |
| spellingShingle | Motavaseli Mahmood Shojaei Saeed Bitaab Ali Hasti Chitsazan Chitsazan Hasti Ghanbar Mohammadi Elyasi Institutional Barriers to Financing Technology-based Small Firms through Venture Capital Mechanism: A Study to Explore the Incentives for Investment in Iran International Journal of Economics and Financial Issues |
| title | Institutional Barriers to Financing Technology-based Small Firms through Venture Capital Mechanism: A Study to Explore the Incentives for Investment in Iran |
| title_full | Institutional Barriers to Financing Technology-based Small Firms through Venture Capital Mechanism: A Study to Explore the Incentives for Investment in Iran |
| title_fullStr | Institutional Barriers to Financing Technology-based Small Firms through Venture Capital Mechanism: A Study to Explore the Incentives for Investment in Iran |
| title_full_unstemmed | Institutional Barriers to Financing Technology-based Small Firms through Venture Capital Mechanism: A Study to Explore the Incentives for Investment in Iran |
| title_short | Institutional Barriers to Financing Technology-based Small Firms through Venture Capital Mechanism: A Study to Explore the Incentives for Investment in Iran |
| title_sort | institutional barriers to financing technology based small firms through venture capital mechanism a study to explore the incentives for investment in iran |
| url | https://www.econjournals.com/index.php/ijefi/article/view/5821 |
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