Investigation of the Relationship Between Location and Success in Venture Capital Investments: European Context

Breilh Ana Milena Montesdeoca () and Dvouletý Ondřej ()
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Breilh Ana Milena Montesdeoca: Department of Entrepreneurship, Prague University of Economics and Business, Czech Republic
Dvouletý Ondřej: Department of Entrepreneurship, Prague University of Economics and Business, Czech Republic

Studia Universitatis „Vasile Goldis” Arad – Economics Series, 2025, vol. 35, issue 2, 86-112

Abstract: Many academic studies explore the relationship between location and the likelihood of a successful outcome of venture capital investments. However, most of these studies are based in the United States. Nevertheless, the existing literature yielded contradicting findings. Some authors claim that the distance between venture capital and startup is crucial in explaining the latter’s venture success. Others find that this is not necessarily the case. This article aims to contribute to the topic by investigating this relationship within the European continent, particularly the countries of Germany, Switzerland, Austria and The Netherlands. The empirical results from the logistic regression estimated using data from Crunchbase covering years 2007-2021, suggest that location’s impact on the startup’s probability of success is negligible. This could mean that the ‘right’ business opportunity can attract investors, despite the geographical distance. The article contributes to the ongoing scholarly debate by providing recommendations for European policymakers.

Keywords: Venture Capital; Location; Startup Success; Information Asymmetries (search for similar items in EconPapers)
JEL-codes: L26 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:suvges:v:35:y:2025:i:2:p:86-112:n:1004

DOI: 10.2478/sues-2025-0009

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