The influence of experiential, inherited and external knowledge on the internationalization of venture capital firms
De Prijcker, Sofie Manigart, Sophie Wright, Mike De Maeseneire, Wouter
De Prijcker, Sofie
Manigart, Sophie
Wright, Mike
De Maeseneire, Wouter
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Publication Type
Working paper
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Supervisor
Publication Year
2011
Journal
Book
Publication Volume
Publication Issue
7
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Publication End page
Publication NUmber of pages
31
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Abstract
This paper aims to understand the effect of foreign knowledge accumulation on the internationalization of professional services, by focusing on the European venture capital industry. We distinguish between experiential knowledge acquired through previous activities, inherited knowledge through the international experience of a firm’s management team and external knowledge accessed through its foreign network partners. We study how these three sources aid the firm in dealing with the high information asymmetries that characterize cross-border activities of highly intangible professional services. Our results, based on a unique sample of 110 European venture capital firms, provide empirical support for the positive effect of experiential knowledge and inherited knowledge on internationalization. External knowledge, however, has a more limited impact on internationalization. Interestingly, venture capital firms with intense international contacts decrease their international activities. Implications for management scholars and practitioners are highlighted.
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Keywords
Accounting & Finance, Internationalization, Venture Capital, Organizational Knowledge, Experiential Knowledge, International Experience, Inherited Knowledge, Human Capital, External Knowledge, Networks