International venture capital research: From cross‐country comparisons to crossing borders

Abstract

Venture capital (VC) has become an international phenomenon, and VC firms are a specific kind of service firm whose characteristics have distinctive implications for international behaviour. There is now a disparate body of research on international aspects of VC across a number of disciplines comprising finance, economics, strategy, entrepreneurship, international business and economic geography. A novel aspect of this paper is that we review and synthesize this disparate literature. A number of research gaps and limitations in the theoretical and methodological approaches involved in previous studies are identified and suggestions made for further research. We show that the vast majority of the literature relates to cross-country comparisons; that is, macro-level comparisons of VC industries across different countries and micro-level comparisons of VC behaviour across countries. From our review of the literature, we argue that an under-researched area concerns the influence of institutional contexts, especially the role of social networks and cultures. Furthermore, our review of the literature indicates that there is a major research gap in relation to work dealing with the crossing of country borders by VC firms. We suggest that resource-based, capabilities, institutional and network theories may be offer insights to further our understanding of the behaviour of VC firms in this area.

Radical Innovation Across Nations: The Preeminence of Corporate Culture

“…First, markets for labor and capital have been evolving in capitalist economies over the past 400 years (Mannie, Zhang, and Hu 2006;Wright, Pruthi, and Lockett 2005). In many capitalist countries, especially with the onset of information technology, these markets are now reasonably efficient and increasingly mature and interconnected.…”

A world of difference? The impact of corporate venture capitalists’ investment motivation on startup valuation

“…Nonetheless, this also implies that we consciously scrutinized a common set of institutional and cultural factors. In view of this, we consider it an important second step for scholars to analyze the transferability of our findings to other VC markets with a range of institutional and cultural settings (Wright et al 2005). Additionally, we focused on CVC investments between January 2009 and January 2016.…”

“…To construct a sample of CVCs unbiased by cross-country differences, like the institutional or cultural environment (Wright et al 2005), we searched Dow Jones' VentureSource database, which is commonly used in the VC literature (Korteweg and Sorensen 2010), for accessing details of domestic startup investments by U.S. CVCs. To account for the cyclical nature of CVC, we considered the time period between January 2009 and January 2016 because CVCs have played an increasingly important role in startup investments since the economic crisis in 2008, and because it is apparently the most recent CVC wave (Dushnitsky and Lenox 2006;Roof 2015).…”

The Performance of Foreign Venture Capital Firms in Emerging Economies: A Study of U.S. Firms in China

“…Batjargal, 2007;Black & Gilson, 1998;Bruton, Ahlstrom, & Puky, 2009;Zacharakis, McMullen, & Shepherd, 2007). However, extant research on the international VC industry mainly focuses on cross-country comparison (Wright, Pruthi, & Lockett, 2005). Researchers have not paid adequate attention to the internationalization of VC firms and their strategies in host countries, with the studies by Patzelt and colleagues (2009) and Li and colleagues (2014) as two recent exceptions.…”