Economic Impact Assessment of the Government-led Venture Firm Certification Policy

In this paper, we evaluate the additional effect of the government-led venture firm certification policy. Starting from 2000, more than 10,000 technology-intensive small and medium-sized companies and new venture firms were created through the development and implementation of policies focused on supporting venture firms. The core of this policy is the certification of qualified firms by the government who is a credible third party. By gaining the public recognition of these certified venture firms in the economy and in the society, the government wants to resolve the issue of information mismatch in the market. By reviewing the impact of venture policies of the past 10 years on the dynamic performance such as the survival and the growth of venture firms, this study attempts to define the new direction of venture policies. Methodologically, to deal with the selectivity issue, we adopt a propensity score matching estimator. According to the results of analysis, certification of venture firms tends to affect the growth of venture firms especially during the early years of venture firms. As small and medium-sized companies accumulate their experience and generate various information that can draw market credibility, the impact of venture firm certification on the growth of venture firms tends to reduce.