A Spatial Investigation of Venture Capital Investment in the Us Biotechnology Industry, 1995-2008
Document Type
Article
Publication Date
6-1-2011
Description
The objective of this research is to investigate the role of geography in the venture capital investment in the US biotechnology industry. Data include 4,409 quarterly investment deals from the MoneyTree Survey during 1995 and 2008. Strong spatial concentration patterns are identified. Using both ordinary squares regressions and geographically weighted regressions, we find that as the geographic distance between biotechnology firms and their investors decreases, deal size increases. Location in established biotechnology clusters, such as New England and California, helps to bring a larger deal into individual firms as well. Also, the impact of distance decay in these two clusters is more significant than that in other regions. In addition, we find that a global venture capital investing syndication network brings large deals. Furthermore, firms in later stages of development, and/or with few financing rounds, tend to receive more capital per deal.
Citation Information
Chen, Ke; Chu, Tingheng; and Billota, Rocky. 2011. A Spatial Investigation of Venture Capital Investment in the Us Biotechnology Industry, 1995-2008. GeoJournal. Vol.76(3). 267-282. https://doi.org/10.1007/s10708-010-9344-z ISSN: 0343-2521