Effects of inward investment on outward investment : The venture capital industry worldwide 1985-2007

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)263-284
Journal / PublicationJournal of International Business Studies
Issue number2
Online published18 Nov 2010
Publication statusPublished - Feb 2011
Externally publishedYes


We identify inward investment as an important impetus to outward investment, supplemental to the impetuses depicted in conventional internationalization frameworks. By incorporating both the spillover and competition effects of foreign entrants, we develop an integrated framework of the inward-outward investment relationship for different investment modes and different home-country and host-country pairs. Our analysis of venture capital (VC) investments worldwide from 1985 to 2007 shows a positive spillover effect on outward investment for inward co-investments and a negative competition effect on outward investment for inward standalone investments. We find the strongest effects when the host country is a laggard in the VC industry and the home country is a leader.

Research Area(s)

  • competition effects, foreign direct investment, spillover effects, venture capital