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Does Venture Capital Investment Really Require Spatial Proximity? An Empirical Investigation

Year: 2008

Type: article

Abstract: We examine the role of spatial proximity for venture capital (VC) investments in Germany. The main database is a survey of seventy-five personal interviews with representatives of different types of financial institutions. The analysis shows that spatial proximity is much less important for VC investments than is often believed. The results indicate that telecommunication cannot be regarded as a means of overcoming the problems of geographical distance. We find that VC suppliers frequently syndicate investments in distant portfolio firms with partners who are more closely located. The age of the portfolio firm does not affect the importance of spatial proximity. On the whole, regional proximity is not a dominant factor in VC partnerships.

Source: Environment and Planning A Economy and Space

DOI: 10.1068/a39353

Authors: Michael Fritsch, Dirk Schilder

Institutions: German Institute for Economic Research, Friedrich Schiller University Jena, TU Bergakademie Freiberg

Language: English

Topic: Private Equity and Venture Capital

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1970252155

FWCI: 25.01

Cites: 34

Cited by: 125

Related to: 10