Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/322089 
Year of Publication: 
2025
Series/Report no.: 
JRC Working Papers on Corporate R&D and Innovation (CoRDI) No. 2/2025
Publisher: 
European Commission, Joint Research Centre (JRC), Seville
Abstract: 
Using deal-level micro data from the Dealroom database, we construct a dynamic co-investment syndication network to examine the influence of cultural proximity and geospatial proximity between investors and start-ups, as well as the network position of global VC firms on investment decisions in European-based start-ups. By applying a linear probability regression model with highdimensional fixed effects over the period 2015-2022, we confirm that both cultural and spatial proximity significantly facilitate VC investment. Moreover, our analysis reveals that a prominent network position - characterized by how well-connected (degree centrality) and how influential (Katz centrality) within the co-investment network- substantially enhances VC investments on account of the facilitated sharing of information, contacts, and resources among investors. Furthermore, our findings reveal that small-world networks, characterized by high clustering coefficients, facilitate investments in distant start-ups, helping to overcome spatial constraints-an aspect largely overlooked in the literature. Small-world syndication networks foster trust among members, complementing each other through differentiation and specialization in industrial knowledge and local markets, potentially altering risk-averse behaviour and enabling investments that transcend geographical boundaries.
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.