The impact of venture capital linkages on start-ups' cluster embeddedness

TL;DRAbstract

The existing literature on cluster embeddedness largely neglects the impact of finance on the development of firm's network linkages. This is striking in so far that particularly venture capital is often referred to as 'smart money' providing firms not only with funds but also with network contacts. Thus, in this paper, we intend to quantitatively assess the impact of venture capitalists on start-ups' embeddedness. Embeddedness generally occurs along three dimensions namely the societal, the network and the territorial one. Societal embeddedness refers to the cultural environment economic actions take place in. Network embeddedness representing the structure and nature of relations an organization is maintaining and territorial embeddedness implying the degree of spatial anchoring of a firm in a specific geographical area. It is assumed that for firms and regions there are several advantages arising from deep network and, respectively, territorial embeddedness: Among others, they inclu

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