Firm Size Effects on Venture Capital Syndication: The Role of Resources and Transaction Costs

Hans Bruining, Ernst Verwaal, Andy Lockett, Mike Wright and Sophie Manigart

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: The present paper examines firm size effects on the decision of venture capital firms to participate in a venture capital investment syndication network. The authors submit that firm size effects in venture capital syndication are dependent on resource acquisition motives and transaction cost considerations. Analysis of 317 venture capital firms in 6 European countries reveals a curve linear relationship between firm size and venture capital syndication participation. We also find positive and negative moderating effects of firm size. The implication of our findings is that there are both advantages and disadvantages in syndicated investment for the smaller and larger venture capitalist.

Keywords: Firm Size; Resource-Based View; Syndication Networks; Transaction Cost Theory; Venture Capital (search for similar items in EconPapers)
JEL-codes: D21 D8 G2 G24 G3 L20 M (search for similar items in EconPapers)
Date: 2005-12-13
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Citations: View citations in EconPapers (2)

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