Journal of Northeastern University Natural Science ›› 2015, Vol. 36 ›› Issue (7): 1060-1064.DOI: 10.12068/j.issn.1005-3026.2015.07.032

• Management Science • Previous Articles    

An Empirical Study on the Preference for Geographic Proximity and Investment Performance of Venture Capital

LI Zhi-ping1,2, LUO Guo-feng1,2, YU Pei-li1, CHEN Kai1   

  1. 1. School of Business Administration, Northeastern University, Shenyang 110819, China; 2. School of Management, Northeastern University at Qinhuangdao, Qinhuangdao 066004, China.
  • Received:2014-05-16 Revised:2014-05-16 Online:2015-07-15 Published:2015-07-15
  • Contact: CHEN Kai
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Abstract: Taking venture capital investments between 2000 and 2009 in mainland China as the research sample, regression analysis was used to explore the factors which affect the preference and performance of geographic proximity of venture capital (VC) in China. The results indicated that VC firms’ reputation and local competition status affect the preference for geographic proximity. Older, larger and more experienced VC firms with stronger IPO records exhibit less preference for geographic proximity while greater competition compels VC firms to invest distant targets. Different from the previous research abroad, no evidence was found that investment networks have any effect on the preference for geographic proximity. Abnormally, the logit regression results showed that investments of geographic proximity may lead to lower returns.

Key words: venture capital, institutional characteristic, competition status, preference for geographic proximity, investment performance

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