Journal article
Competition and Specialization in the VC Market: A Non-monotonic Relationship
Review of industrial organization, v 62(3), pp 241-269
01 May 2023
Abstract
We investigate the relationship between competition and stage specialization in the venture capital (VC) markets. A typical successful entrepreneurial company goes through multiple stages of VC investments; but an average VC firm specializes and participates only in a subset of these stages. We hypothesize that a VC firm's decision to stage-specialize (or not) poses a trade-off between business expansion and competition mitigation. Both effects are influenced by the intensity of competition. Consistent with a prediction of the theoretical model, we find robust empirical evidence for a non-monotonic relationship-an inverted-U shape-between competition and stage specialization in the U.S VC markets between 1980 and 2012. This result is novel and can have interesting managerial and policy implications.
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Details
- Title
- Competition and Specialization in the VC Market: A Non-monotonic Relationship
- Creators
- Christos Cabolis - International Institute for Management DevelopmentMian Dai - Drexel UniversityKonstantinos Serfes - Drexel University
- Publication Details
- Review of industrial organization, v 62(3), pp 241-269
- Publisher
- Springer Nature
- Number of pages
- 29
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000935380400001
- Scopus ID
- 2-s2.0-85148448815
- Other Identifier
- 991020537778504721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Economics
- Management