Foreign Venture Capital Investment Alliances in China

Sunday, 15 February 2015
Exhibit Hall (San Jose Convention Center)
Ying Geng, Management & Organization, University of Maryland, College Park, College Park, MD
This study investigates the question how a veture capital (VC) firm's investment alliances network position changes when the firm expands into foreign markets and taps into a new network. The target of this study is the population of all U.S. VC firms that have invested in mainland China from the beginning of the VC industry in China till 2011. With comprehensive VC investment data of both foreign and Chinese indigenous firms, this study employs social network analysis tools,maps out the syndication(investmnet alliances) networks in the U.S. and in China, and explores whether a VC firm that is occupying a central position in the U.S. VC market will achieve an equally central position after it enters the Chinese VC market. Our regression analysis results show that on average the network position in home country network (U.S.) does not garrantee a favorable network position in the foriegn market. Firms' network capability depends on context specifica factors and their market-specific partnership structure.