The Effects of Good and Bad Neighbors on Venture Capital Backed Firms

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Academic Paper
Title The Effects of Good and Bad Neighbors on Venture Capital Backed Firms
Author Ed Egan
Status Tabled
© edegan.com, 2016

Summary

Good neighbors engage in open innovation, and don't block startups from using ideas by suing them. Open innovation includes patent licensing and sales (both in and out), engaging in joint ventures, making acquisitions and having spin-offs. This paper uses geocoded data on startups and non-sales offices of publicly traded firms, to estimate whether proximity to good neighbors increases the likelihood of funding and successful exit while proximity to bad neighbors decreases it.

Data

  • SDC VentureXpert
  • SDC M&A
  • SDC Joint Ventures
  • Core Patent Data
  • Patent Reassignment Data
  • CRSP


Also:

  • Google Maps API
  • Geocoding tool
  • SDC Normalizer

Policy implications

This would be important for cities who are looking to enhance their local entrepreneurship ecosystems. A common policy tool is to use property tax abatement (like the 313 programs in Texas) to encourage large corporates to open a branch office in the city. We could reveal who to invite and who to avoid.