Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257820 
Year of Publication: 
2022
Citation: 
[Journal:] International Journal of Financial Studies [ISSN:] 2227-7072 [Volume:] 10 [Issue:] 1 [Article No.:] 1 [Publisher:] MDPI [Place:] Basel [Year:] 2022 [Pages:] 1-13
Publisher: 
MDPI, Basel
Abstract: 
The conventional wisdom has maintained that being in proximity to entrepreneurial ecosystems helps startups to raise financing, develop and grow. In this paper, we examine the effect of a major component of an entrepreneurial ecosystem-financial or venture capital clusters on the exit of a startup through mergers and acquisitions (M&A). We find that probability of successful exit through M&A increases if the venture capitalist invested in the startup is in a venture capital (VC) cluster. Location of the startup in a top VC cluster is not significant for success once we control for the location of the VC in a top VC cluster.Our results are robust to different specifications of the models that use different time periods, reputation of VC, industry, and the quality of the startup company. Our results provide evidence for VCs, startups and policy makers who want to better understand the components of entrepreneurial ecosystems and their relation to the M&A exits of startups.
Subjects: 
financial institutions
financing clusters
mergers and acquisitions
startup financing
venture capital
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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