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Knowledge-intensive property rights and the evolution of venture capitalism

Published online by Cambridge University Press:  01 August 2008

CRISTIANO ANTONELLI  and
MORRIS TEUBAL
CRISTIANO ANTONELLI*
Affiliation:
Laboratorio di economia dell'innovazione, Dipartimento di economia, Università di Torino, Italy, Brick (Bureau of Research on Innovation, Complexity and Knowledge), Collegio Carlo Alberto, Italy
MORRIS TEUBAL
Affiliation:
Department of Economics, The Hebrew University of Jerusalem, Israel
*
Correspondence to: Cristiano Antonelli, Dipartimento di Economia, Via PO 53, 10124 Torino, Italy.
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Abstract

Venture capitalism is a major institutional innovation based on identifying economies of scope in transactions of technological knowledge, bundled with managerial competence, reputation, screening procedures, and equity. It has paved the way to the emergence of new surrogate markets for knowledge, i.e. financial markets specialized in trading knowledge-intensive property rights. This development has important benefits in terms of risk management and hence profitability of investments in high-tech start-ups. The dynamic efficiency effects of the new institution also derive from the fact that the public at large, through its investments in knowledge-based income streams, contributes to the creation of new economically useful knowledge and capabilities.

Type
Research Article
Information
Journal of Institutional Economics , Volume 4 , Issue 2 , August 2008 , pp. 163 - 182
Copyright
Copyright © The JOIE Foundation 2008

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