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Abstract

State-assisted venture capital programs are a popular strategy to stimulate entrepreneurship and small business development. This study estimated the number of job-years created from 1988 to 2000 by the publicly- assisted program Kansas Venture Capital, Inc. (KVCI). The impact of KVCI in job-years generated was measured net of hypothetical job growth under three alternative scenarios: portfolio firms failed without KVCI fundings, firms followed their national industry employment patterns without KVCI funding, or firms followed the employment change patterns of a comparison set of Kansas businesses. Duration model estimation results indicated that KVCI portfolio firms had significantly higher survival rates than comparison Kansas firms. The number of jobyears created and saved credited to KVCI investments varied from 391 to 13,576 and the cost per job year created and saved ranged from $296 to $10,281 depending on assumptions of firm employment change in the absence of KVCI investments. The findings indicate that impact assessment results are highly sensitive to underlying assumptions.

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