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  • 1 Hungarian Academy of Sciences, H-1112 Budapest, Budaörsi út 45, Hungary
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Since the development of young companies with a good growth potential can also be expected to boost economic growth, reduce unemployment and enhance competitiveness, economic policy makers consider it a matter of prime importance that the venture capital industry provide appropriate capital supply for their development. Many countries implement central programmes to promote the venture capital financing of the development of enterprises that would have no access to venture capital on a purely market basis. The experience in Hungary is that state intervention in the venture capital industry mainly has political reasons, it uses budgetary sources sparingly and it is isolated from the private sector. But for its almost complete inefficiency, state activity would have softened the conditions of competition, crowded out the private sector and given preferential treatment to the political clientele. Realizing the abortive nature of its intervention, the state made no effort to identify the causes of failure and the role of supply and demand factors, respectively, hindering the venture capital supply of the small and medium-size enterprise (SME) sector. The intervention practice chosen by the state most recently is contrary to the practice of the European Union in several respects — a circumstance dooming government measures to boost the venture capital industry to failure again.

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Editor(s)-in-Chief: Prof. Dr. Mihályi, Péter

Editor(s): Ványai, Judit

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      Török, Ádám (Chairman)
      Berlinger, Edina
      Halmai, Péter
      Kézdi, Gábor
      Kónya, István
      Köllő, János
      Magas, István

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      Ǻslund, Anders
      Kolodko, Grzegorz
      Mau, Vladimir
      Messerlin, Patrick A
      Nuti, Mario Domenico
      Wagener, Hans-Jürgen

Corvinus University of Budapest
Department of Macroeconomics
Fővám tér 8, Budapest, H-1093, Hungary