Venture capital investment in Latin America: The role of experience, distances, and network features

Marcelo Guzella, Felipe Buchbinder and Verônica Santana

Emerging Markets Review, 2024, vol. 60, issue C

Abstract: We investigate the determinants of Venture Capital (VC) firms' activity in Latin America. Using more than 10 thousand funding rounds from 2002 to 2020, we found that the status of the firm determines more frequent and larger deals. Non-redundant connections increase the odds of investing, but redundant ones explain larger amounts. Younger firms participate in more deals, but mature firms invest larger amounts. Geographic proximity explains more investments, but institutional differences (regulatory quality and rule of law) explain larger rounds. We show that forecasting models with those features are useful for asset allocation and investment promotion.

Keywords: Venture capital; National distances; Syndicated investments; Social networks; Machine learning (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:60:y:2024:i:c:s1566014124000402

DOI: 10.1016/j.ememar.2024.101145

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