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The impact of portfolio composition on affiliation benefits

Özmel, Ümit and Güler, Işın (2010) The impact of portfolio composition on affiliation benefits. In: 4th Israel Strategy Conference: Research Workshop of the Israel Science Foundation (ISC 2010), Haifa, Israel (Accepted/In Press)

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Abstract

This study argues and empirically demonstrates that the value of a venture's affiliations depends in part on its relative standing in the portfolio of affiliations held by its partners. Relative standing is determined by how the venture ranks among other ventures in the partner's portfolio with respect to observable signals of quality. We argue that the relative standing of a venture in its partner's portfolio influences the focal venture's access to the partner's resources and, subsequently, the venture's performance. We also argue that a venture's relative standing becomes a more important predictor of performance when the partner has a larger portfolio or higher status. An empirical test of the equity investments by venture capital firms in 1011 private biotechnology ventures between 1980 and 2004 provides support for the hypothesized relationships.

Item Type:Papers in Conference Proceedings
Subjects:UNSPECIFIED
ID Code:16184
Deposited By:Işın Güler
Deposited On:21 Dec 2010 14:35
Last Modified:21 Dec 2010 14:35

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