TY - JOUR

T1 - Cross-border venture capital flows and local ties: Evidence from developed countries

AU - Tykvová, Tereza

AU - Schertler, Andrea Gisela

PY - 2011/2

Y1 - 2011/2

N2 - Using a unique global dataset from developed countries, this paper provides evidence that not only traditional determinants of international capital flows affect cross-border venture capital flows, but that ties among local venture capital investors are related to size and style of these flows. Our results on size indicate that both number and value of cross-border flows between two countries increase with tie intensities within the local venture capital industries in both countries. Our results on style suggest that strong local ties go hand in hand with more intensive ties to foreign investors. Thus, rather than protecting the local market and fending off competition from foreign investors, local tie intensity seems to stimulate international syndication and expansion of venture capital financing across borders, which allows venture capital investors to build geographically diversified portfolios and to add value by building cross-border syndicates. These effects seem to be stronger for those foreign investors who already have experience in the particular destination country. © 2010 The Board of Trustees of the University of Illinois.

AB - Using a unique global dataset from developed countries, this paper provides evidence that not only traditional determinants of international capital flows affect cross-border venture capital flows, but that ties among local venture capital investors are related to size and style of these flows. Our results on size indicate that both number and value of cross-border flows between two countries increase with tie intensities within the local venture capital industries in both countries. Our results on style suggest that strong local ties go hand in hand with more intensive ties to foreign investors. Thus, rather than protecting the local market and fending off competition from foreign investors, local tie intensity seems to stimulate international syndication and expansion of venture capital financing across borders, which allows venture capital investors to build geographically diversified portfolios and to add value by building cross-border syndicates. These effects seem to be stronger for those foreign investors who already have experience in the particular destination country. © 2010 The Board of Trustees of the University of Illinois.

KW - Management studies

KW - F21

KW - G24

KW - Internationalization

KW - Syndication

KW - Ties

KW - Venture capital

UR - http://www.scopus.com/inward/record.url?scp=78650787508&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/140aa2da-a919-35ac-a363-65a5b10142a8/

U2 - 10.1016/j.qref.2010.09.005

DO - 10.1016/j.qref.2010.09.005

M3 - Journal articles

VL - 51

SP - 36

EP - 48

JO - Quarterly Review of Economics and Finance

JF - Quarterly Review of Economics and Finance

SN - 1062-9769

IS - 1

ER -