Status Across Distance: Local and Nonlocal Venture Capitalists in New York City, 1993-2012

• In Event: 195 - Regular Session. Economic Sociology. Analytical Approaches to the Economy

Abstract

Despite the well-documented importance of homophily and transitivity in encouraging new ties between businesses, most inter-organizational networks are characterized by frequent bridge ties. This paper adds the the recent literature on these far-flung relationships by studying the impact of local and national network centrality measures of venture capital firms in the New York area from 1993-2012 on investment success. The main findings are that while local centrality, defined on the network of ties formed only within the NYC metro, is important in determining the success of VC investments in local companies, it is an even stronger predictor if a firm is headquartered outside the area.

Author

• Michael Charles Siemon, Cornell University