Institutional Isomorphism in Venture Capital Investment Decision Making: Industry Characteristics and Investment Preferences

33 Pages Posted: 23 Jan 2006

See all articles by Michael D. Ensley

Michael D. Ensley

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology

Jon C. Carr

University of Southern Mississippi

Date Written: January 15, 2006

Abstract

This study uses an institutional frame to develop a test of isomorphic pressures that influence venture capital principals' investment behavior. Specifically, we hypothesize several linkages between specific industry-level characteristics and the isomorphic pressures that subsequently affect investment decision making in the venture capital industry with respect to those industries. The sample consists of 14,331 investment deals that occurred from 1992-2002, and a set of archival measures of industry task environment characteristics. The findings demonstrate that clear institutional isomorphic mechanisms are at work in the venture capital industry. Recommendations for future research and extensions of this study are developed.

Keywords: Venture Capital Decision-making, Institutional Theory, Industry Preferences

JEL Classification: G24, D81, G11

Suggested Citation

Ensley, Michael D. and Carr, Jon C., Institutional Isomorphism in Venture Capital Investment Decision Making: Industry Characteristics and Investment Preferences (January 15, 2006). Available at SSRN: https://ssrn.com/abstract=876394 or http://dx.doi.org/10.2139/ssrn.876394

Michael D. Ensley (Contact Author)

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology ( email )

110 8th St
Troy, NY 12180
United States

Jon C. Carr

University of Southern Mississippi ( email )

Hattiesburg, MS 39406
United States
601-266-6545 (Phone)
601-266-4630 (Fax)

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