Journal article
Hot Markets, Sociocognitive Cues, and New Market Entry in the US Venture Capital Industry
ENTREPRENEURSHIP THEORY AND PRACTICE, v 48(2), p478
Mar 2024
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Investing in sectors that a firm has never invested in before is fundamentally a form of entrepreneurial experimentation and an integral part of wealth creation. We consider how the broader market conditions and sociocognitive cues jointly affect venture capital (VC) firms' investment decisions in new industries that are unrelated to their past experience. Although VCs are more likely to enter an unrelated new industry when the overall market is hot, they also take sociocognitive cues from their own social contacts and news media. Using the population of U.S. VC investments between 1990 and 2016, we find support for our predictions.
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Details
- Title
- Hot Markets, Sociocognitive Cues, and New Market Entry in the US Venture Capital Industry
- Publication Details
- ENTREPRENEURSHIP THEORY AND PRACTICE, v 48(2), p478
- Publisher
- SAGE PUBLICATIONS INC; THOUSAND OAKS
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Drexel University
- Web of Science ID
- WOS:001003106600001
- Scopus ID
- 2-s2.0-85159326340
- Other Identifier
- 991021860716804721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business