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False expectations: reconsidering the role of informal venture capital in closing the regional equity gap

Avdeitchikova, Sofia LU (2009) In Entrepreneurship and Regional Development 21(2). p.99-130
Abstract
The role of informal venture capital in entrepreneurial process and economic development is increasingly recognized by scholars and policy-makers around the world. Much of the attention that this form of financing has received during the last couple of decades is due to its potential to bridge the regional equity gap. This study is concerned with regional distribution of informal venture capital and factors explaining the allocation of informal investments, and it is based on a large random sample of informal venture capital investors in Sweden. The key findings are that the informal venture capital market in Sweden shows a considerable concentration in metropolitan areas and university cities. Further, investments conducted in these... (More)
The role of informal venture capital in entrepreneurial process and economic development is increasingly recognized by scholars and policy-makers around the world. Much of the attention that this form of financing has received during the last couple of decades is due to its potential to bridge the regional equity gap. This study is concerned with regional distribution of informal venture capital and factors explaining the allocation of informal investments, and it is based on a large random sample of informal venture capital investors in Sweden. The key findings are that the informal venture capital market in Sweden shows a considerable concentration in metropolitan areas and university cities. Further, investments conducted in these places are allocated in proportion to the new business formation rate and concentration of technology-based firms, while the only factor that provides some explanation for the location of informal investments in the peripheral regions is the proportion of the regional population that is considering starting their own business. Finally, there is a small but significant reallocation of informal venture capital from peripheral regions to metropolitan areas and university cities, which shows that the informal venture capital market in Sweden contributes rather to sustaining the regional equity gap than to bridging it. (Less)
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author
organization
publishing date
type
Contribution to journal
publication status
published
subject
in
Entrepreneurship and Regional Development
volume
21
issue
2
pages
99 - 130
publisher
Taylor & Francis
external identifiers
  • wos:000264641200001
  • scopus:67650281742
ISSN
0898-5626
DOI
10.1080/08985620802025962
language
English
LU publication?
yes
id
23751438-b0c2-42a5-b8b6-816c7869f8f0 (old id 1386696)
date added to LUP
2009-04-20 12:27:23
date last changed
2017-07-23 04:05:39
@article{23751438-b0c2-42a5-b8b6-816c7869f8f0,
  abstract     = {The role of informal venture capital in entrepreneurial process and economic development is increasingly recognized by scholars and policy-makers around the world. Much of the attention that this form of financing has received during the last couple of decades is due to its potential to bridge the regional equity gap. This study is concerned with regional distribution of informal venture capital and factors explaining the allocation of informal investments, and it is based on a large random sample of informal venture capital investors in Sweden. The key findings are that the informal venture capital market in Sweden shows a considerable concentration in metropolitan areas and university cities. Further, investments conducted in these places are allocated in proportion to the new business formation rate and concentration of technology-based firms, while the only factor that provides some explanation for the location of informal investments in the peripheral regions is the proportion of the regional population that is considering starting their own business. Finally, there is a small but significant reallocation of informal venture capital from peripheral regions to metropolitan areas and university cities, which shows that the informal venture capital market in Sweden contributes rather to sustaining the regional equity gap than to bridging it.},
  author       = {Avdeitchikova, Sofia},
  issn         = {0898-5626},
  language     = {eng},
  number       = {2},
  pages        = {99--130},
  publisher    = {Taylor & Francis},
  series       = {Entrepreneurship and Regional Development},
  title        = {False expectations: reconsidering the role of informal venture capital in closing the regional equity gap},
  url          = {http://dx.doi.org/10.1080/08985620802025962},
  volume       = {21},
  year         = {2009},
}