 Legal framework quality and success of (different types of) venture capital investmentsJournal of Banking & Finance, 2018, vol. 87, issue C, 333-350 Abstract: Drawing on an analysis of 8,270 companies from 41 countries, I explore the relationship between success of venture capital investments and legal frameworks in the investment countries. Legal framework quality is related to success, but the effect varies with the deal type. First, the significant and positive relationship between legal framework quality and success is more pronounced for domestic deals than for international deals. Further investigations suggest that international venture capitalists often exit their portfolio companies abroad, particularly when these companies are located in countries with inefficient legal frameworks. In addition, the results lend support to the view that international venture capitalists have a greater experience and reputation. Second, legal framework quality seems to be more important for success in syndicated than in standalone deals. This finding supports the view that a sound legal framework may improve the benefit–cost balance of syndication, while an inefficient legal framework may tend to increase costs in syndicated deals. Keywords: Venture capital; Legal framework; Success; Internationalization; Syndication (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:87:y:2018:i:c:p:333-350 DOI: 10.1016/j.jbankfin.2017.10.015 Access Statistics for this article Journal of Banking & Finance is currently edited by Ike Mathur More articles in Journal of Banking & Finance from Elsevier |
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