The Effect of Venture Capital Networks and Institutions on Portfolio Companies' Performance in Southeast Asia

Download or read book The Effect of Venture Capital Networks and Institutions on Portfolio Companies' Performance in Southeast Asia written by Natdanai Aleenajitpong and published by . This book was released on 2019 with total page 3 pages. Available in PDF, EPUB and Kindle. Book excerpt: Venture capital firms (VC) have encountered with uncertainty and risk of asymmetric information due to an investment in early-to-growth stage and technology-based start-ups. Venture capital syndication network helps reduce a broad gap of information asymmetry and agency problem in a venture capital investment. Although agency and asymmetric information theory help motivate the formation of networks in emerging venture capital markets, Institutional theory is more suitable in explaining this situation, as the practice of venture capital appears to be influenced from institutional changes. As network connections are found to be the success factor for venture capitalists under a lack of fully developed institutional environment in emerging market. Venture capital industry in Southeast Asia is nascent yet in demanding and fast growing. Southeast Asia (SEA) is one of the most significant and dynamic propellers of the world economy. To clarify the role of networks and institutions on VC-backed firms in SEA VC market, we then investigate the relationship between networks and institutions and their impact on portfolio company's performance. Our study will initiate an empirical evidence by quantifying VC networks and institutions among SEA countries and implementing time-series panel regressions through the performance of VC-backed companies.