This paper examines how government funding programs geared towards early-stage companies interact with private capital markets. Government programs were more frequent in periods with more private venture activity, a relationship that was stronger in nations with better public governance. We find that such government funding programs increased local innovation, particularly when the programs focused on early-stage ventures or collaborated with the private sector. These findings are most consistent with the explanation that the reliance on private capital markets enabled governments to mitigate investment frictions and improve capital allocation.
Trade finance: developments and issues
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Since decades, the financial industry has experienced a continuous evolution in service delivery due to digitalization. This evolution is characterized by expanded connectivity and enhanced speed of information processing both at the customer interface and in back-office processes. Recently, there has been a shift in the focus of digitalization from improving the delivery of traditional tasks to introducing fundamentally new business opportunities and models for financial service companies. Digital Finance encompasses a magnitude of new financial products, financial businesses, finance-related software, and novel forms of customer communication and interaction—delivered by FinTech companies and innovative financial service providers.