Networking as a Barrier to Entry and the Competitive Supply of Venture Capital

• 成果类型: Article
• 署名作者: Hochberg, Yael V.; Ljungqvist, Alexander; Lu, Yang
• 署名单位: Northwestern University; New York University
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/j.1540-6261.2010.01554.x
• 发表日期: 2010
• 页码: 829-859
• 关键词: investments; syndication; FIRMS; regression; variables; MODEL

摘要

We examine whether strong networks among incumbent venture capitalists (VCs) in local markets help restrict entry by outside VCs, thus improving incumbents' bargaining power over entrepreneurs. More densely networked markets experience less entry, with a one-standard deviation increase in network ties among incumbents reducing entry by approximately one-third. Entrants with established ties to target-market incumbents appear able to overcome this barrier to entry; in turn, incumbents react strategically to an increased threat of entry by freezing out any incumbents who facilitate entry into their market. Incumbents appear to benefit from reduced entry by paying lower prices for their deals.