Historical military conflict and cross-border VC performance: The role of ownership control

Pia Helbing; Axel Buchner; Abdul Mohamed; David Yoon

doi:10.1111/1467-8551.12749

Historical military conflict and cross-border VC performance: The role of ownership control

Pia Helbing, Axel Buchner, Abdul Mohamed, David Yoon

Research output: Contribution to journal › Article › peer-review

Abstract / Description of output

This study investigates the effect of historical military conflict (between home countries of venture capital [VC] firms and portfolio companies) on the performance of cross-border VC investments. Using exhaustive data on global cross-border investments during 1986-2017, we find that adverse memories imprinted by historical military conflict have a negative effect on cross-border performance as measured by IRR and PME. We show that nation-dyadic (i.e. political affinity) and ownership control strategy (i.e. board seat and syndication) related contingencies moderate the relationship between historical military conflict and cross-border performance. Collectively, our findings shed light on the presence of intergroup interaction challenges and mistrust when investing in cross-border VC deals and demonstrate channels of mitigating their adverse effects.

Original language	English
Journal	British Journal of Management
Early online date	14 Jul 2023
DOIs	https://doi.org/10.1111/1467-8551.12749
Publication status	E-pub ahead of print - 14 Jul 2023

Keywords / Materials (for Non-textual outputs)

venture capital
IRR
PME
political affinity
military conflict

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10.1111/1467-8551.12749Licence: Creative Commons: Attribution (CC-BY)

BuchnerEtal2023BJMHistoricalMilitaryConflictFinal published version, 370 KBLicence: Creative Commons: Attribution (CC-BY)

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title = "Historical military conflict and cross-border VC performance: The role of ownership control",

abstract = "This study investigates the effect of historical military conflict (between home countries of venture capital [VC] firms and portfolio companies) on the performance of cross-border VC investments. Using exhaustive data on global cross-border investments during 1986-2017, we find that adverse memories imprinted by historical military conflict have a negative effect on cross-border performance as measured by IRR and PME. We show that nation-dyadic (i.e. political affinity) and ownership control strategy (i.e. board seat and syndication) related contingencies moderate the relationship between historical military conflict and cross-border performance. Collectively, our findings shed light on the presence of intergroup interaction challenges and mistrust when investing in cross-border VC deals and demonstrate channels of mitigating their adverse effects.",

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doi = "10.1111/1467-8551.12749",

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T2 - The role of ownership control

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AU - Mohamed, Abdul

AU - Yoon, David

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N2 - This study investigates the effect of historical military conflict (between home countries of venture capital [VC] firms and portfolio companies) on the performance of cross-border VC investments. Using exhaustive data on global cross-border investments during 1986-2017, we find that adverse memories imprinted by historical military conflict have a negative effect on cross-border performance as measured by IRR and PME. We show that nation-dyadic (i.e. political affinity) and ownership control strategy (i.e. board seat and syndication) related contingencies moderate the relationship between historical military conflict and cross-border performance. Collectively, our findings shed light on the presence of intergroup interaction challenges and mistrust when investing in cross-border VC deals and demonstrate channels of mitigating their adverse effects.

AB - This study investigates the effect of historical military conflict (between home countries of venture capital [VC] firms and portfolio companies) on the performance of cross-border VC investments. Using exhaustive data on global cross-border investments during 1986-2017, we find that adverse memories imprinted by historical military conflict have a negative effect on cross-border performance as measured by IRR and PME. We show that nation-dyadic (i.e. political affinity) and ownership control strategy (i.e. board seat and syndication) related contingencies moderate the relationship between historical military conflict and cross-border performance. Collectively, our findings shed light on the presence of intergroup interaction challenges and mistrust when investing in cross-border VC deals and demonstrate channels of mitigating their adverse effects.

KW - venture capital

KW - IRR

KW - PME

KW - political affinity

KW - military conflict

U2 - 10.1111/1467-8551.12749

DO - 10.1111/1467-8551.12749

M3 - Article

SN - 1045-3172

JO - British Journal of Management

JF - British Journal of Management

ER -

Historical military conflict and cross-border VC performance: The role of ownership control

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Keywords / Materials (for Non-textual outputs)

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