Journal
JOURNAL OF BUSINESS VENTURING
Volume 29, Issue 5, Pages 704-721Publisher
ELSEVIER
DOI: 10.1016/j.jbusvent.2013.09.001
Keywords
Cross-border venture capital; Exits; Network distance; Geographical distance; Cultural distance
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Contributing to the literature on local bias and financial networks, we examine how direct and indirect network ties of financial intermediaries mitigate the effects of distance and preference for local investments. In our analysis of cross-border venture capital exits, we find that proximity within networks facilitates cross-border transactions, which suggests that network distance is an important dimension of distance in addition to its geographical and cultural dimensions. The results also suggest that network distance affects the reach and quality of mediated information: indirect ties to partners' partners, with their broad reach, facilitate the identification of investment opportunities, whereas direct ties, which have certification effects, facilitate quality assessment. (C) 2013 Elsevier Inc. All rights reserved.
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