Judging foreign startups

Research Summary Venture capital (VC) firms predominantly source investments from local networks within tight geographic bounds. Against that tendency, VCs are increasingly investing internationally—but with substantial heterogeneity across firms in extent, location, and success. We propose a mechanism that explains these patterns. The ties VCs form to immigrant entrepreneurs when investing domestically provide access to the knowledge and connections of those immigrants, which facilitates VC investments in the immigrants' homelands. Using data on U.S. VC activity in India, we find that firms invest in more Indian startups as their ties to Indian entrepreneurs in the United States increase—particularly in the Indian region where immigrants originate and when the VC faces heightened domestic competition. Such ties also enhance the odds of successful exit for the VC's Indian investments. Managerial Summary Why are venture capital (VC) firms increasingly investing in foreign startups, and why do these firms differ in the location and success of such international investments? We demonstrate that the ties to immigrant entrepreneurs VCs establish when investing domestically provide knowledge and connections that enable future VC investments in the immigrants' homelands. Using data on U.S. VC firms, we find that the more ties to Indian immigrant entrepreneurs a firm develops, the more it subsequently invests in Indian startups. This effect is stronger when the VC firm faces heightened domestic competition (a push effect) and in the specific regions of India where the immigrants originate (a pull effect). Domestic ties to Indian immigrants also help U.S. VCs make more successful investments in India.

Debunking Myths in Corporate Venture Capital: What Works, What Doesnnt, and How To Make It Happen

The article investigates the major determinants of total factor productivity of Russian regions, in particular, the role of spillovers and agglomeration effects. Agglomeration effects are found to be important in regions located in the European part of Russia and in regions with low shares of extraction in the gross regional product (GRP): employment density in such regions turns out to be a significant factor determining total factor productivity. At the same time, neither employment density nor the degree of urbanization affects regions’ sensitivities to spillovers of total factor productivity from other regions — instead, these sensitivities depend only on the sizes of regional capitals and on shares of credit in GRP. This suggests that firms from regions with large capitals and high shares of credit in GRP are more actively expanding into neighboring regions: through their linkages with local firms in host regions, they may create positive correlations between total factor productivities in such host regions and their home regions. The analysis is based on methods of spatial econometrics — namely, the spatial lag and spatial error models with constant and variable spatial coefficients. The estimation is performed with maximum likelihood.

This paper explores how systemic barriers, specifically institutional biases, disproportionally restrict business opportunities for underprivileged groups through data analysis and literature review. This paper also highlights how biases in loan approval criteria and interest rates create systemic barriers. Minority-owned businesses and low-income entrepreneurs face significant challenges in securing necessary business loans and venture capital. This paper examines these biases and proposes possible strategies to reduce them and promote financial inclusion.

This article documents the economic relevance of measuring cognitive uncertainty: people’s subjective uncertainty over their ex ante utility-maximizing decision. In a series of experiments on choice under risk, the formation of beliefs, and forecasts of economic variables, we show that cognitive uncertainty predicts various systematic biases in economic decisions. When people are cognitively uncertain—either endogenously or because the problem is designed to be complex—their decisions are heavily attenuated functions of objective probabilities, which gives rise to average behavior that is regressive to an intermediate option. This insight ties together a wide range of empirical regularities in behavioral economics that are typically viewed as distinct phenomena or even as reflecting preferences, including the probability weighting function in choice under risk; base rate insensitivity, conservatism, and sample size effects in belief updating; and predictable overoptimism and -pessimism in forecasts of economic variables. Our results offer a blueprint for how a simple measurement of cognitive uncertainty generates novel insights about what people find complex and how they respond to it.

Summary Soil carbon (C) storage is a key ecosystem service. Soil C stocks play a vital role in soil fertility and climate regulation, but the factors that control these stocks at regional and national scales are unknown, particularly when their composition and stability are considered. As a result, their mapping relies on either unreliable proxy measures or laborious direct measurements. Using data from an extensive national survey of English grasslands, we show that surface soil (0–7 cm) C stocks in size fractions of varying stability can be predicted at both regional and national scales from plant traits and simple measures of soil and climatic conditions. Soil C stocks in the largest pool, of intermediate particle size (50–250 μm), were best explained by mean annual temperature (MAT), soil pH and soil moisture content. The second largest C pool, highly stable physically and biochemically protected particles (0·45–50 μm), was explained by soil pH and the community abundance‐weighted mean (CWM) leaf nitrogen (N) content, with the highest soil C stocks under N‐rich vegetation. The C stock in the small active fraction (250–4000 μm) was explained by a wide range of variables: MAT, mean annual precipitation, mean growing season length, soil pH and CWM specific leaf area; stocks were higher under vegetation with thick and/or dense leaves. Testing the models describing these fractions against data from an independent English region indicated moderately strong correlation between predicted and actual values and no systematic bias, with the exception of the active fraction, for which predictions were inaccurate. Synthesis and applications. Validation indicates that readily available climate, soils and plant survey data can be effective in making local‐ to landscape‐scale (1–100 000 km2) soil C stock predictions. Such predictions are a crucial component of effective management strategies to protect C stocks and enhance soil C sequestration.

This paper tests whether the junior public equity markets serve as an effective development market for early‐stage firms compared to private venture capital (VC). Focusing on the Canadian market, we compare the long‐run stock performance of firms that graduate from the Toronto Venture Stock Exchange (TSX‐V) to the Toronto Stock Exchange (TSX) against the performance of VC‐backed firms that have a direct IPO on the TSX. Controlling for various confounders and possible selection biases, we find that TSX‐V graduations significantly outperform VC‐backed IPOs by 28.2 percentage points in the three years following the TSX listing. Our results are consistent with the idea that a TSX‐V listing provides the insiders of early‐stage companies with valuable public‐markets experience.

To evaluate the tracking of within-athlete changes in criterion measures of whole-body fat percentage (BF%; dual-energy X-ray absorptiometry) with skinfold thickness (Σ 4, 6, or 8) in wheelchair basketball players. Dual-energy X-ray absorptiometry-derived whole BF% and Σ 4, 6, or 8 skinfolds were obtained at 5 time points over 15 months (N = 16). A linear mixed model with restricted maximum likelihood (random intercept, with identity covariance structure) to derive the within-athlete prediction error for predicting criterion BF% from Σ skinfolds was used. This prediction error allowed us to evaluate how well a simple measure of the Σ skinfolds could track criterion changes in BF %; that is, the authors derived the change in Σ skinfolds that would have to be observed in an individual athlete to conclude that a substantial change in criterion BF% had occurred. Data were log-transformed prior to analysis. The Σ 8 skinfolds was the most precise practical measure for tracking changes in BF%. For the monitoring of an individual player, a change in Σ 8 skinfolds by a factor of greater than 1.28 (multiply or divide by 1.28) is associated with a practically meaningful change in BF% (≥1 percentage point). The Σ 8 skinfolds can track changes in BF% within individuals with reasonable precision, providing a useful field monitoring tool in the absence of often impractical criterion measures.

Based on Considering the Financial Risk in an Overall Research Framework, Analyzing the Relationship between the Economic Fluctuation and Financial Opening in the Developing Countries

How firm heterogeneity affects foreign direct investment location choice: Micro-evidence from new foreign manufacturing firms in the Pearl River Delta

The Turkish wine industry presents an interesting case to explore firm behaviour, institutions and regional economic resilience. With political Islam gaining popularity over the past two decades, the local industry has faced many challenges at the policy level. These include an enormous tax burden, bans on alcohol advertising, promotion and sponsorship, and the prohibition on online sales of alcoholic products. Under these conditions, many producers do not have the necessary skills to manoeuvre institutional challenges therefore economic survival mainly depends on local agents’ own capabilities. Understanding the resilience of an industry as such calls for an institutionally nuanced and agent-centric micro-level focus. In this context, the paper seeks to establish a theoretical framework that facilitates an explanation of how agents’ inherent systematic anomalies, biases and spatio-temporal cognitive limitations restrict their resilience and the twin notions of myopia and hypermetropia serve as the basis for our argument. The producer firms of the Thrace wine-making cluster in the northwest corner of Türkiye constitute our empirical focus. Our findings illustrate that the impact of adverse sectoral policies on local firms are heterogeneous and that there exists at least three types of winemaking firms in Türkiye depending on their agendas and cognitive (dis)abilities.

Image quality and dose in mammography in 17 countries in Africa, Asia and Eastern Europe: Results from IAEA projects

Past studies have shown that a native Spanish speaker’s use of phrasal prominence is a good indicator of her level of English prosody acquisition. Because of the cross-linguistic differences in the organization of phrasal prominence and durational contrasts, we hypothesize that those speakers with English-like prominence in their L2 speech are also expected to have acquired English-like rhythm. Statistics from a corpus of native and nonnative English confirm that speakers with an Englishlike phrasal prominence are also the ones who use English-like rhythm. Additionally, two methods of automatic score generation based on vowel duration times demonstrate a correlation of at least 0.6 between these automatic scores and subjective scores for phrasal prominence. These findings suggest that simple vowel duration measures obtained from standard automatic speech recognition methods can be salient cues for estimating subjective scores of prosodic acquisition, and of pronunciation in general.

The issue of ‘equity gaps’ has loomed large in recent discussions of enterprise formation and development, both in the United Kingdom and in Germany. One particularly intriguing, but highly elusive, aspect of this issue is the question of whether equity gaps have a regional dimension: are certain regions at a systematic disadvantage with respect to the provision of equity capital? In this paper, we explore this question in the context of the UK and German venture capital industries, drawing both on unpublished industry data and on information obtained from original surveys of venture capital firms in the two countries. We report clear evidence that the venture industries in both countries are spatially constituted. Despite important national differences, venture capital firms tend to be concentrated in identifiable clusters and their investment outcomes show clear evidence of spatial proximity effects; investment is disproportionately concentrated in those regions that also contain the major clusters of venture capital firms. However, how far this spatial form produces regional equity gaps is hard to determine. Venture capitalists themselves argue that they do not intentionally discriminate between regions in their decisionmaking, and many acknowledge the existence of funding and deal-size gaps but not regional gaps per se. But their perception of project risk is, nevertheless, regionally sensitive. We argue that the notion of a simple supply gap overlooks the way in which the localised form of the industry is based on a dynamic learning process in which demand and supply processes combine with their embeddedness in social networks and individual perceptions in a mutually reinforcing way. Less-favoured regions, with low investment rates, few local venture capital firms, and a dearth of experienced specialist intermediaries, may thus be trapped in a situation of both depressed demand for and supply of venture capital investment.

Using data from an original and unique firm-level survey conducted in Southeast Asia, this paper examines the impacts of shifting from exploiting internal resources to exploring external information sources on product innovations and engaging foreign market for firms in emerging economies. This paper explores how the impacts of a shift toward external links vary across knowledge resources from trade and non-trade partners as well as across domestic and international partners. We also present findings regarding how the impacts of shifting to exploring external information sources vary between local firms and foreign affiliates. A 10% shift in resource allocation from internal resources to external links can generate a 1.4 percentage point increase in the likelihood of costly product innovation as well as a 1.9-3.8 percentage point increase in the probability of foreign market participation.