Industry-specific specialization in venture capitalists’ internationalization decisions

Antonia Nörthemann ()
Additional contact information
Antonia Nörthemann: Heinrich-Heine-University

Journal of Business Economics, 2023, vol. 93, issue 5, No 5, 927 pages

Abstract: Abstract This study considers the impact of venture capitalists’ industry specialization on cross-border investment decisions. The article argues that specialized venture capitalists’ liability of foreignness is lower in specific international markets as assessments of the market and the behaviour of market participants are facilitated through industry-specific learning effects. Specialization leads to lower risk in cross-border investments from a venture capitalist’s point of view. With increasing deal-specificity, the support and value enhancement of a foreign portfolio company are ensured in international markets due to the investor’s specialization. A multilevel investigation of 46,525 worldwide venture capital deals from 2001 to 2019 in 69 countries shows a positive relationship between venture capitalists’ industry specialization and internationality. The results show that the likelihood of a cross-border deal increases with higher levels of industry specialization. Furthermore, this effect is moderated by determinants at the institutional and portfolio company levels, reflecting the degree of information asymmetry between the venture capital firm and the portfolio company.

Keywords: Venture capital; Internationalization; Specialization; Industry experience; Learning (search for similar items in EconPapers)
JEL-codes: G11 G24 M13 M16 O34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11573-022-01129-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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: https://EconPapers.repec.org/RePEc:spr:jbecon:v:93:y:2023:i:5:d:10.1007_s11573-022-01129-1

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/11573

DOI: 10.1007/s11573-022-01129-1

Access Statistics for this article

Journal of Business Economics is currently edited by Günter Fandel

More articles in Journal of Business Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().