Venturing into the unknown with strangers: Substitutes of relational embeddedness in cross-border partner selection in venture capital syndicates

Miguel Meuleman, Mikko Jääskeläinen, Markku V J Maula*, Mike Wright

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

26 Citations (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)131-144
Number of pages14
JournalJournal of Business Venturing
Volume32
Issue number2
DOIs
Publication statusPublished - 1 Mar 2017
MoE publication typeA1 Journal article-refereed

Keywords

  • Cross-border venture capital
  • Embeddedness
  • Institutions
  • Partner selection
  • Syndication

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