Venture Capital and Value Added: Impact of Distance on Performance

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Trucci Bruschi, Gerardo Raúl (2020) Venture Capital and Value Added: Impact of Distance on Performance. [Trabajo Fin de Máster]

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Abstract

Research found that venture capital financing has a positive effect on firms’growth. Part of this positive impact is explained by the value added, i.e., monitoring and strategic advice, provided by venture capital entities (VCEs, hereafter) to their portfolio companies. Literature found that spatial proximity between VCE and invested firms facilitates the interchange of information, and thus the execution of value added
activities provided by VCEs. In this work, we investigated whether geographical distance, measured in both kilometers and travel time between portfolio companies and their lead investor, affects performance. We base our analysis on a sample of 1035 firms observed between 1996 and 2018. The results of our difference-in-differences econometric estimation indicate that distance matters for companies invested by private venture capital entities: on average, firms that are closer to their lead investor present a higher growth in terms of assets when compared to the most distant ones.


Item Type:Trabajo Fin de Máster
Directors:
Directors
Martí Pellón, José
Uncontrolled Keywords:Venture capital; Small and medium enterprises; Financial and non-financial resources; Value added; Monitoring costs; Growth; Performance; Distance; Geographic proximity.
Subjects:Social sciences > Economics > Business enterprises
Social sciences > Economics > Finance
JEL:G14, G24, L20, L26
Título del Máster:Máster Universitario en Finanzas de Empresa
ID Code:62511
Deposited On:13 Oct 2020 08:32
Last Modified:13 Oct 2020 08:32

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