Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311240 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Business Economics [ISSN:] 1861-8928 [Volume:] 93 [Issue:] 5 [Publisher:] Springer [Place:] Berlin, Heidelberg [Year:] 2022 [Pages:] 891-927
Publisher: 
Springer, Berlin, Heidelberg
Abstract: 
This study considers the impact of venture capitalists' industry specialization on cross-border investment decisions. The article argues that specialized venture capitalists' liability of foreignness is lower in specific international markets as assessments of the market and the behaviour of market participants are facilitated through industry-specific learning effects. Specialization leads to lower risk in cross-border investments from a venture capitalist's point of view. With increasing deal-specificity, the support and value enhancement of a foreign portfolio company are ensured in international markets due to the investor's specialization. A multilevel investigation of 46,525 worldwide venture capital deals from 2001 to 2019 in 69 countries shows a positive relationship between venture capitalists' industry specialization and internationality. The results show that the likelihood of a cross-border deal increases with higher levels of industry specialization. Furthermore, this effect is moderated by determinants at the institutional and portfolio company levels, reflecting the degree of information asymmetry between the venture capital firm and the portfolio company.
Subjects: 
Venture capital
Internationalization
Specialization
Industry experience
Learning
JEL: 
G11
G24
M13
M16
O34
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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