Home-Country Networks and Foreign Expansion: Evidence from the Venture Capital Industry

57 Pages Posted: 12 Jul 2006 Last revised: 27 Feb 2017

See all articles by Isin Guler

Isin Guler

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Mauro F. Guillen

University of Pennsylvania - Management Department

Date Written: June 1, 2006

Abstract

We argue that higher-status organizations, those facing a greater network constraint, and those whose network partners have already expanded abroad are more likely to pursue opportunities in foreign markets. We also argue that social networks affect how the organization reacts to uncertainty in markets. Higher-status organizations and those more network-constrained prefer markets with less uncertainty, while organizations whose partners have expanded to less-secure markets exhibit more tolerant attitudes towards uncertainty. Using data on the syndication experience and market entries of 1,010 American venture capital firms over the 1990-2002 period, we find robust support for the predictions involving social status and partners' expansion, and some evidence for the impact of network constraint.

Keywords: venture capital, social networks, uncertainty, international investment

Suggested Citation

Guler, Isin and Guillen, Mauro Federico, Home-Country Networks and Foreign Expansion: Evidence from the Venture Capital Industry (June 1, 2006). Available at SSRN: https://ssrn.com/abstract=913661 or http://dx.doi.org/10.2139/ssrn.913661

Isin Guler (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

Mauro Federico Guillen

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States
215-573-6267 (Phone)
215-326-3205 (Fax)

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