Cross-border venture capital investments: The impact of foreignness on returns

Buchner, Axel; Espenlaub, Susanne; Khurshed, Arif; Mohamed, Abdulkadir

doi:10.1057/s41267-017-0116-6

Cited by 48 publications

(37 citation statements)

References 106 publications

(198 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The capacity of PE firms to exploit their institutional knowledge -developed in their home markets -depends significantly on the differences in the quality of regulatory institutions between the origin and destination markets (Carney et al, 2016;Holburn & Zelner, 2010). Due to the nature of this type of investment, PE firms must navigate effectively the laws and regulations of the destination market in order to successfully invest in an EM (Buchner, Espenlaub, Khurshed, & Mohamed, 2017;Guler & Guillén, 2010b;Khoury, Junkunc, & Mingo, 2015). Firms from markets with strong institutions face multiple complications when investing in EMs with weak institutional settings (Li, Vertinsky, & Li, 2014).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

The interplay of national distances and regional networks: Private equity investments in emerging markets

2018

View full text Add to dashboard Cite

Integrating social network theory with the literature on national distance, we examine how the investment strategy followed by a private equity (PE) firm in an emerging market is affected by the interplay between two important types of national distances-institutional and geographic-and the firm's centrality in the regional syndication network. Covering over 5,000 investment transactions, we use a dataset of more than 500 PE firms based in both developed and emerging markets targeting three emerging market regions-Latin America, Southeast Asia, and Eastern Europe-from 1996 to 2011. The results show that, depending on the level of centrality of PE firms in regional syndication networks, institutional and geographic distances can have differing effects-both in magnitude and direction-on their investment strategies in emerging markets. Moreover, these effects are contingent on whether the PE firm is from a developed market or an emerging market. We conclude that different types of national distances can operate in dissimilar ways depending on (1) firm-level factors defined at the regional levelsuch as centrality in the regional syndication network-and (2) the developed market or emerging market nature of the PE firm.

show abstract

Section: Theory and Hypothesesmentioning

confidence: 99%

The interplay of national distances and regional networks: Private equity investments in emerging markets

2018

View full text Add to dashboard Cite

show abstract

“…Foreign PE firms may furthermore lack legitimacy or suffer from seller mistrust (Bell et al 2012), which creates a disadvantage over domestic peers that likely translates into pressure to pay higher prices. Buchner et al (2018) suggest that foreign PE firms may also be forced to accept higher prices, and subsequently lower returns, due to lack of investment opportunities in saturated home markets. In sum, these arguments lead us to our first hypothesis.…”

Section: Hypothesesmentioning

confidence: 99%

“…Recent numbers suggest that cross-border buyouts recorded an all-time high in 2018, with 1858 cross-border deals worth a total of $456 billion. 1 This surge is best explained by high levels of fund inflows, in combination with saturated home markets and a quest for portfolio diversification (Buchner et al 2018).…”

Section: Introductionmentioning

confidence: 99%

“…Although our focus is on leveraged buyouts (LBOs), results are also broadly related to prior literature on performance implications of cross-border VC transactions. Buchner et al (2018) document underperformance of cross-border VC investments relative to equivalent domestic transactions in terms of deal-level returns. Bertoni and Groh (2014) show that the probability of exiting a VC investment via trade sale is positively correlated to the additional set of M&A opportunities brought by cross-border investors.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Cross-border buyout pricing

2020

View full text Add to dashboard Cite

Using a dataset of 1149 global private equity transactions, we find that cross-border buyouts are associated with significantly higher valuation multiples than domestic ones. We attribute this finding to informational disadvantages of foreign acquirers. Consistent with this idea, we find that the spread in valuation multiples narrows when the target operates in a country with high accounting standards, when it was publicly listed prior to the buyout, and when information production is facilitated due to large firm size. Further results suggest that local partnering in a syndicate serves as an effective remedy to avoid adverse pricing effects. The spread in valuation multiples is also less pronounced for large buyout funds, presumably because they draw on sufficient organizational resources to cope with cross-border-related transaction costs.

show abstract

“…Faced with the new era background, venture capital enterprises should speed up the transformation of the inherent thinking, actively embrace new technologies and ideas, and constantly find and solve problems, so as to make it in the future development of an invincible position [11,12]. Based on the background of big data, venture capital enterprises have welcomed the possibility of greater development than before [13].…”

Section: Introductionmentioning

confidence: 99%

Research on financial network big data processing technology based on fireworks algorithm

Luo

2019

J Wireless Com Network

View full text Add to dashboard Cite

Big data is a hot issue in both theoretical and practical circles. Although many scholars have analyzed the risk of internal control of venture capital information system from different angles, there is still a lack of research on the risk of internal control of venture capital system under big data environment. Aiming at the concept and characteristics of large data, this paper proposes the research of internal control system of venture capital information system based on large data processing technology. The risk prediction model based on improved quantum support vector machine is used to verify the accuracy of the model. This paper divides the risk critical control process one by one for the hardware, software, personnel, information and operation rules of the venture capital object; probes into the main risks of different control objects in the process of information system construction under the big data environment; and puts forward the corresponding risk management methods of system internal control. Simulation experiments verify the reliability of the model and algorithm.

show abstract

Cross-border venture capital investments: The impact of foreignness on returns

Abstract: This is a repository copy of Cross-border venture capital investments: The impact of foreignness on returns.

Cited by 48 publications

References 106 publications

The interplay of national distances and regional networks: Private equity investments in emerging markets

The interplay of national distances and regional networks: Private equity investments in emerging markets

Cross-border buyout pricing

Research on financial network big data processing technology based on fireworks algorithm

Contact Info

Product

Resources

About