Venturing into the unknown with strangers: Substitutes of relational embeddedness in cross-border partner selection in venture capital syndicates
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Publication type
FT ranked journal articlePublication Year
2017Journal
Journal of Business VenturingPublication Volume
32Publication Issue
2Publication Begin page
131Publication End page
144
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Syndicating with prior partners through relationally embedded ties may be widespread, but not always optimal when investing across borders especially if few prior partners operate in the focal market. However, the substitutes of relational embeddedness for trust creation in cross-border partner selection are poorly understood. We develop and test a model of how relational embeddedness interacts with structural embeddedness and legal and normative institutions and how relational embeddedness and these three substitutes jointly affect cross-border partner selection in venture capital syndicates. We test the hypotheses in the context of cross-border venture capital syndication in 12 European countries. Our findings based on a case-control analysis suggest that although relational embeddedness is a key driver of future partnering, structural embeddedness and trust generating institutions such as high quality legal frameworks and industry associations facilitate cross-border partnering and diminish the need to rely on relationally embedded ties in cross-border partner selection.Knowledge Domain/Industry
EntrepreneurshipAccounting & Finance
ae974a485f413a2113503eed53cd6c53
10.1016/j.jbusvent.2017.01.001