Venture capital investment: the role of predator-prey dynamics with learning by doing

James A. Brander and Jean-Etienne de Bettignies ()

Economics of Innovation and New Technology, 2009, vol. 18, issue 1, pages 1-19

Abstract: This paper suggests that endogenous dynamics of the 'predator-prey' type can provide a contributing explanation for both high-venture capital concentration by industry and 'boom and bust' industry-level investment dynamics. We propose a model based on the idea that venture capitalists favor industries where they have significant experience and industries with a large pool of good investment opportunities. However, investment 'uses up' opportunities and therefore tends to deplete the pool of unexploited opportunities. The resulting industry-level interactive dynamics naturally give rise to venture capital investment cycles similar to observed patterns.

Keywords: venture capital; dynamics; predator-prey; concentration; learning (search for similar items in EconPapers)
Date: 2009

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:taf:ecinnt:v:18:y:2009:i:1:p:1-19

Ordering information: This journal article can be ordered from
http://www.tandf.co.uk/journals/subscription.html

Access Statistics for this article

More articles in Economics of Innovation and New Technology from Taylor and Francis Journals
Series data maintained by Christopher F. Baum ().