Does culture matter? The impact of cultural differences on VC-CEO interaction Online publication date: Mon, 10-May-2010
by Qian Ye
International Journal of Entrepreneurship and Innovation Management (IJEIM), Vol. 12, No. 1, 2010
Abstract: Sapienza and Gupta (1994) examined the impact of agency risks and task uncertainty on venture capitalist-chief executive officer (VC-CEO) interaction. They found that the frequency of interaction depended on the extent of VC-CEO goal congruence, the degree of the CEO's new venture experience, the venture's stage of development and the degree of technical innovation. But their model overlooks the situation under which VCs invest overseas, making the internationalisation of venture capital remain an unfilled gap at VC-CEO interaction in cross-cultural contexts. Drawing on Sapienza and Gupta's work, the author consider the moderating effects of cultural differences on VC-CEO interaction. The author proposes that cultural differences affect the strength of the functions of agency risks and uncertainty on VC-CEO interaction by influencing not only VCs' assessment of agency risks and uncertainty, but also VCs' behavioural responses to their assessment.
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