Venture Capital Portfolio Investment Under Uncertainty : Real Options and Networks

Research output: Chapters, Conference Papers, Creative and Literary Works (RGC: 12, 32, 41, 45)32_Refereed conference paper (with ISBN/ISSN)peer-review

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Detail(s)

Original languageEnglish
Title of host publicationStrategies in the Era of De-Globalization - Conference Program Book
Publication statusPublished - 25 Sep 2018

Conference

Title38th Annual Conference of the Strategic Management Society
PlaceFrance
CityParis
Period22 - 25 September 2018

Abstract

While prior research has approached decision-making under uncertainty from either real options or social network perspective, a joint consideration of both theories sheds additional insights. We first propose that uncertainty in a strategic domain has a negative effect on a VC firm’s portfolio depth in that domain but a positive effect on the firm’s portfolio diversity across strategic domains. We further hypothesize that a VC firm’s within-industry centrality accentuates the negative effect of uncertainty on portfolio depth, and reinforces the positive effect of uncertainty on portfolio diversity. However, a VC firm’s within-industry brokerage attenuates the negative effect of uncertainty on portfolio depth, and weakens the positive effect of uncertainty on portfolio diversity. Analyses of VC investments in the U.S. during 1976-2015 largely support our thesis.

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Citation Format(s)

Venture Capital Portfolio Investment Under Uncertainty : Real Options and Networks. / Li, Yong; Yang, Haibin.

Strategies in the Era of De-Globalization - Conference Program Book. 2018.

Research output: Chapters, Conference Papers, Creative and Literary Works (RGC: 12, 32, 41, 45)32_Refereed conference paper (with ISBN/ISSN)peer-review