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Doctoral defense of Milos Milicsevics

Budapest campus
Monday, July 27, 2020, 2:20 pm – 4:20 pm

Doctoral Defense of Milos Milicsevics on


will be held on Monday, 27 July 2020, at 2:20 pm (CET)

Examination Committee
Chair: Michael LaBelle, CEU, Department of Economics and Business

Members: Paul Lacourbe, CEU, Department of Economics and Business (Supervisor)
György Bőgel, CEU, Department of Economics and Business (Co-supervisor)
Yusaf Akbar, CEU, Department of Economics and Business (Internal Reader)
External Readers: Bill Fischer, IMD and Josh Lerner, Harvard Business School


The defense takes place online, if interested in joining, please contact:



This research presents evidence on the role of venture capital finance in entrepreneurial processes and development of resources and capabilities of Hungary-based investee firms from management and public policy perspectives.

This research examines the provision of: i) strategic assistance, ii) assistance in professionalization and iii) relational capital by venture capitalists to Hungary-based investee firms. The research concludes that venture capitalists are a critical source of external knowledge for Hungary-based early-stage firms and the entrepreneurial sector as a whole. This research indicates that one of the critical knowledge-sharing processes in economy is the process of assistance of venture capitalists, which entails efficient and timely transfer of valuable information between venture capitalists and investee firms. The process of assistance determines the likelihood that firms in high-growth sectors will achieve fast time-to-market, first-mover advantage and sustained competitive advantage. This research finds that assistance provided by venture capitalists to Hungary-based investee firms is a tangible and result-orientated activity, provided with the objective of improving productivity and economic performance of investee firms even after the first round of financing. The research also highlights the complexity of organizing resources for early-stage firms, where management perspectives and private sector business experience have a critical role.

This research presents new evidence on the impact of public sector efficiency on economic performance. In particular, this research highlights the scale of negative consequences of policy-driven expansion of government venture capital financing on the entrepreneurial sector, innovation, knowledge-transfer, productivity and economic performance. This research shows that policy-driven expansion of the Hungary-based government venture capital-backed entrepreneurial sector, currently representing one of the largest in Europe with 31% of investee firms, enhanced market failures, instead of improving them. This research provides empirical evidence that policy-driven expansion of government venture capital financing in Hungary crowds-out venture capital financing and contributes to displacing entrepreneurial processes in Hungary. The evidence collected by this research indicates that government venture capital finance is not a complementary source of financing for Hungary-based early-stage investee firms and that it does not improve any examined entrepreneurial process.

The evolution of Hungarian venture capital market has had a unique, discontinuous and, at times, volatile trajectory. Hungary’s most recent policy perspectives on expansion of government venture capital financing are in sharp contrast to the ‘market principle’ that played the central role in the policies stimulating the expansion of Hungarian entrepreneurial sector in the aftermath of the global financial recession of 2008. The results of this research provide a warning for policymakers in Hungary, given that liquidating government venture capitalists is a difficult but imminent challenge. The unattractive structure of Hungarian venture capital market and a growing government venture capital-backed entrepreneurial sector with declining productivity and economic performance will turn government into the venture capitalist of last resort.

An important aspect of the scholarly contribution of this research is its eclectic approach to studying venture capital finance, which utilizes perspectives from management, strategy, organizational behaviour, public policy and economics.