Institutions and venture capital market creation: The case of an emerging market

Bustamante, Carla, V; Mingo, Santiago; Matusik, Sharon F.

Abstract

Venture capital (VC) markets are essential for the development of high-growth entrepreneurship. Previous studies have discussed the importance of formal institutions and regulations in the creation of VC markets. However, the role played by informal institutions-and how they interact with formal institutions-is still puzzling. To disentangle this issue, we performed a 26-year analysis of the case of Chile, an emerging market where formal institutions and regulations had long been in place but a VC market failed to emerge. Based on our findings, we develop a theoretical framework where we propose that (1) the presence of strong formal regulatory institutions that support VC markets is a necessary but not sufficient condition for the emergence of a robust level of VC activity, and (2) informal institutions that legitimate high-growth entrepreneurship are a necessary antecedent to the availability of high-growth entrepreneurs and, therefore, to the emergence of a robust level of VC activity.

Más información

Título según WOS: Institutions and venture capital market creation: The case of an emerging market
Título de la Revista: JOURNAL OF BUSINESS RESEARCH
Volumen: 127
Editorial: Elsevier Science Inc.
Fecha de publicación: 2021
Página de inicio: 1
Página final: 12
DOI:

10.1016/j.jbusres.2021.01.008

Notas: ISI