Buy Local? The Geography of Successful and Unsuccessful Venture Capital Expansion / Henry Chen, Paul Gompers, Anna Kovner, Josh Lerner.

Format:

Book

Author/Creator:

Chen, Henry.

Contributor:

National Bureau of Economic Research.

Gompers, Paul.

Kovner, Anna.

Lerner, Josh.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15102.

NBER working paper series no. w15102

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

We document geographic concentration by both venture capital firms and venture capital-financed companies in three cities - San Francisco, Boston, and New York. We find that firms open new satellite offices based on the success rate of venture capital-backed investments in an area. Geography is also significantly related to outcomes. Venture capital firms based in locales that are venture capital centers outperform, regardless of the stage of the investment. Ironically, this outperformance arises from outsized performance outside of the venture capital firms' office locations, including in peripheral locations. If the goal of state and local policy makers is to encourage venture capital investment, outperformance of non-local investments suggests that policy makers might want to mitigate costs associated with established venture capitalists investing in their geographies rather than encouraging the establishment of new venture capital firms

Notes:

Print version record

June 2009.