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Firm Experience and Market Entry by Venture Capital Firms (1962-2004)

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  • Dimo Dimov
  • Pablo Martin de Holan

Abstract

In this paper, we examine a firm's decision to enter new markets as related to the depth and breadth of its experience and the relative distance of those markets. We situate our discussion and analysis in the context of the venture capital (VC) industry, and examine whether and when US VC firms enter five high-technology investment markets through first- or later-round investments. This setting allows us to observe both the firms that chose to enter a new market and those that did not, and analyse the antecedents of these decisions. We find that VC firms overall are less likely to enter distant markets; those with broader experience are more likely to make first-round entries. In addition, VC firms with deeper investment experience are more likely to make first-round entries in proximate markets and less likely to enter distant markets and make later-round entries. These results offer interesting implications for the literature on organizational learning and entrepreneurship. Copyright (c) 2009 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.

Suggested Citation

  • Dimo Dimov & Pablo Martin de Holan, 2010. "Firm Experience and Market Entry by Venture Capital Firms (1962-2004)," Journal of Management Studies, Wiley Blackwell, vol. 47(1), pages 130-161, January.
  • Handle: RePEc:bla:jomstd:v:47:y:2010:i:1:p:130-161
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    References listed on IDEAS

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    Cited by:

    1. Nan Zhou & Mauro F. Guillén, 2015. "From home country to home base: A dynamic approach to the liability of foreignness," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 907-917, June.
    2. Thomas Hutzschenreuter & Ingo Kleindienst & Christina Guenther & Martin Hammes, 2016. "Speed of Internationalization of New Business Units: The Impact of Direct and Indirect Learning," Management International Review, Springer, vol. 56(6), pages 849-878, December.
    3. Alexander S. Alexiev & Justin J. P. Jansen & Frans A. J. Van den Bosch & Henk W. Volberda, 2010. "Top Management Team Advice Seeking and Exploratory Innovation: The Moderating Role of TMT Heterogeneity," Journal of Management Studies, Wiley Blackwell, vol. 47(7), pages 1343-1364, November.
    4. Li, Yong & Vertinsky, Ilan B. & Li, Jing, 2014. "National distances, international experience, and venture capital investment performance," Journal of Business Venturing, Elsevier, vol. 29(4), pages 471-489.

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