Venture Capital Networks in Southeast Asia: Network characteristics and cohesive subgroups

Aleenajitpong, Natdanai; Leemakdej, Arnat

doi:10.1016/j.irfa.2021.101752

Cited by 8 publications

(3 citation statements)

References 36 publications

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“…VCFs syndicate to mitigate the information asymmetry between VCFs and their portfolio companies (Brinster & Tykvová, 2021; Engel, 2004; Gompers & Lerner, 2001). As suggested in the theories of social network, inter-organization ties, channeling information from external environment (Koka & Prescott, 2008), mitigate the uncertainty faced by the VCFs (Lee, 2007) and improves their decision-making (Burt, 2000; Granovetter, 1985), which plays a greater role in emerging markets where institutional context is less mature (Aleenajitpong & Leemakdej, 2021). To be specific, the syndicate pools up effort in due diligence to diverse the potential portfolio (Cumming, 2006; Hege et al, 2009, p. 16; Markowitz, 1952; Wilson, 1968) and to optimize the screening and selection of portfolio (Cumming, 2006; Leleux, 2007; Lerner, 1995; Schwienbacher, 2008).…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…Venture capital (VC) syndication, defined as at least two venture capital firms (VCFs) investing in the same portfolio company (Bygrave, 1987), is a common practice, especially in emerging markets (Aleenajitpong & Leemakdej, 2021). Figure 1 shows the statistics of VC deals (counted as rounds) in China mainland through 2000 to 2018, where the syndicated deals are noticeably growing in terms of number and proportion.…”

Section: Introductionmentioning

confidence: 99%

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Like Performance, Perfect Match: Role of Past Performance in Venture Capital Syndication

Qiu,

Liu,

Yang

2023

Sage Open

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Syndication among venture capital firms (VCFs) is increasingly prevailing in recent years, especially in emerging markets like China. Some of the VCFs have to syndicate with “worse performers” despite the “better performer preference.” The primary aim of this article is to contribute to our understanding of the impact performance gap among syndicated VCFs on formulation and duration of syndicate. The data consist of over 295,000 pair of VCFs syndicated in China mainland from 2000 to 2020. We find the negative effect of performance gap on the propensity of syndication with self-categorization of VCFs as the moderator. The key contribution of this paper is to test the significance of homogenous performance in syndication. This study advances the knowledge of agency in collaboration and sheds new light on organizational performance feedback in venture capital markets.

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Section: Hypothesis Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Like Performance, Perfect Match: Role of Past Performance in Venture Capital Syndication

Qiu,

Liu,

Yang

2023

Sage Open

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“…In addition, firms' growth is a long-term and dynamic process, which requires the ability and quality of the enterprises management to adapt with. VCs often introduce professional managers, using their extensive interpersonal network and set up new professional management teams, improving the professional decision-making capabilities of a firm' management (Aleenajitpong and Leemakdej, 2021). Therefore, in the practice of VCs, fraught with high risk, high uncertainty and severe information asymmetry, VCs help monitor and balance the self-interest behavior of management and the encroachment behavior of major shareholders, weakening their opportunistic behavior by improving CG.…”

Section: Venture Capital and Investment Efficiencymentioning

confidence: 99%

Striving to improve investment efficiency among Chinese firms: does the role of venture capital matter?

Wang

Ran

2022

CMS

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Purpose This study aims to investigate the impact of venture capital (VC) involvement on investment efficiency (IE) and its potential action mechanisms from the perspective of financial resource allocation. Design/methodology/approach Using data of Chinese firms between 2008 and 2020, and the propensity score matching–difference in differences method, the authors investigate the relationship between VC and IE. Findings The results show that VC involvement significantly promotes IE, and the effect exhibits an inverted U-shape dynamic over time. The authors find two mechanisms through which VC promotes IE: alleviating financing constraints and improving corporate governance. Supplementary tests indicate that VC institutions with high reputations play a significant role in enhancing IE; the promotion effect is more pronounced for firms in non-high-tech industries, firms facing higher industrial competition and firms located in areas with better property rights protection systems. Originality/value This study provides several original contributions. First, based on principal–agent and financing constraint theories, this study enhances the literature by revealing how VC drives the IE of newly public firms in China. Second, to the best of the authors’ knowledge, this is the first attempt to identify the mechanisms between VC and IE; Third, from an empirical perspective, besides discussing the average and dynamic effect of VC on IE, this study also explores the impact of the interaction between VC and market competition and property rights protection on IE.

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Vicarious learning from peer innovation failures: The moderating effects of venture capital syndication networks

Tao,

Huang,

Guan

et al. 2024

Manage Decis Econ

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Firms can derive insights not only from their own failures but also from the innovation failures of counterparts in the same industry. This study investigates how 109 Chinese A‐share listed high‐tech firms (2013–2022) learn from counterparts' innovation failures to improve their success rate of innovation and emphasizes the crucial role of venture capital (VC) syndication networks in facilitating knowledge transfer. Central VCs within the network notably enhance vicarious learning from others' failures. Further empirical analysis shows a significant increase in the success rate of exploitative innovations, while the impact on exploratory innovations is minimal.

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Venture Capital Networks in Southeast Asia: Network characteristics and cohesive subgroups

Cited by 8 publications

References 36 publications

Like Performance, Perfect Match: Role of Past Performance in Venture Capital Syndication

Like Performance, Perfect Match: Role of Past Performance in Venture Capital Syndication

Striving to improve investment efficiency among Chinese firms: does the role of venture capital matter?

Vicarious learning from peer innovation failures: The moderating effects of venture capital syndication networks

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