Going Abroad, Friends on Board: Cross-Border Venture Capital and Syndication

26 Pages Posted: 31 Oct 2019

See all articles by Zhiyi Qiu

Zhiyi Qiu

Shanghai University of Finance and Economics, School of Public Economics & Administration, Students

Rong Chen

Shanghai University of Finance and Economics, School of Public Economics & Administration, Department of Investment, Students

Ye Yang

Shanghai University of Finance and Economics

Date Written: October 22, 2019

Abstract

Cross-border venture capitals (CBVCs) are increasingly prevailing in recent decades, especially in emerging markets like China. With foreignness growing, it turns from liability into advantage in the context of CBVCs. We investigate the VC firm’s syndication when faced with foreignness caused by culture differences. We find an inverse U-shape relationship between foreignness and syndication, with the firm’s reputation as moderator. Apart from syndication, foreign firms establish a local subsidiary when faced with foreignness.

Keywords: cross-border venture capital, syndication, liability of foreignness, reputation, subsidiary

JEL Classification: G24

Suggested Citation

Qiu, Zhiyi and Chen, Rong and Yang, Ye, Going Abroad, Friends on Board: Cross-Border Venture Capital and Syndication (October 22, 2019). Available at SSRN: https://ssrn.com/abstract=3473620

Zhiyi Qiu (Contact Author)

Shanghai University of Finance and Economics, School of Public Economics & Administration, Students ( email )

Shanghai
China

Rong Chen

Shanghai University of Finance and Economics, School of Public Economics & Administration, Department of Investment, Students ( email )

Shanghai, 200433
China

Ye Yang

Shanghai University of Finance and Economics ( email )

777 Guoding Road
Shanghai, AK Shanghai 200433
China

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