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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.