Distant friends and close enemies: Sub-national cultural distance and Venture Capital investments

Diego D'Adda, Massimiliano Guerini, Anita Quas
2020 Zenodo  
In this paper we study how cultural distance between entrepreneurial ventures and prospective venture capital investors affects the likelihood of investment realization. Whilst other scholars addressed this question only looking at cross-border investments, we exploit sub-country measures of cultural distance to extend the analysis to domestic investments. Results highlight that sub-national cultural distances are relevant for domestic investments even more than for international deals.
more » ... onal deals. Moreover, cultural distance is a stronger barrier to investment realization when information asymmetries are higher, namely for younger companies operating in high-technology sectors.
doi:10.5281/zenodo.3906330 fatcat:lsiljkbxh5gxdofnfxxfanv4xm