Network position and market maturity: how to be innovative?

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The findings of multiple studies suggest that the network position of venture capital firms (VCs) can stimulate innovativeness of their backed firms. However, there is an ongoing debate in the academic field regarding which specific network position stimulates innovativeness most. Possibly, the level of market maturity is the underlying reason for when, which specific type of network position is most valuable for enhancing innovativeness. The aim of this study was to find out to what extent this is the case. In order to accomplish this, two different samples were drawn from a database of Crunchbase. One sample contained VCs with their backed firms operating in an emerging market, while the other sample included VCs with their backed firms active in a mature market. For each sample, a multiple regression analysis was conducted. The results of these analyses led to the conclusion that there is not a specific network position of VCs that significantly enhances the innovativeness of backed firms in both types of markets. Thereby, the findings indicate that the level of market maturity does not moderate the effect that a VC’s network position has on the innovativeness of VC-backed firms.
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