Cross-border venture capital investments: The impact of foreignness on returns

• 成果类型: Article
• 署名作者: Buchner, Axel; Espenlaub, Susanne; Khurshed, Arif; Mohamed, Abdulkadir
• 署名单位: University of Passau; University of Manchester; Alliance Manchester Business School; Cranfield University
• 刊物名称: JOURNAL OF INTERNATIONAL BUSINESS STUDIES
• ISSN/ISSBN: 0047-2506
• DOI: 10.1057/s41267-017-0116-6
• 发表日期: 2018
• 页码: 575-604
• 关键词: venture capital; Cross-border; return; IRR; PME; FOREIGNNESS; distance

摘要

Against the background of the growing internationalization of venture capital (VC) investing, this is the first global comparison of the returns generated by individual domestic and cross-border deals. We examine investments worldwide during 1971-2009 and find that cross-border investments significantly underperform compared with equivalent domestic investments. Returns are negatively affected by geographic distances, cultural disparities, and institutional differences between the home and host countries. Returns on cross-border and domestic deals also decline after the late 1990s. International portfolio diversification and the saturation of domestic markets may explain why VC investors make cross-border investments despite poor expected returns.