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Origin and Development of a Network PaperJung-Chin Shen
Origin of the paper It seems that a syndication network consisting
both IVC and CVC increases the chance of IPO of an invested company.
Behind the statement Incomplete data Wrong measure Wrong method Poor reasoning
Development of a paper is like a real option: when to exercise an abandon option is a strategic decision.
What idea can be a paper? Interesting
Interesting theories are those which deny certain assumptions of their audience, while non- interesting theories are those which affirm certain assumptions of their audience (Davis, 1971)
Important/Relevant: so what?
Practical implications The tension between theory and practice:
Academics is important in its own right Nothing is more practical than a good theory A theory will be considered truly interesting only
if it has repercussions on both levels
What do we know about VC network?Network positions are advantageous
VC investments tend to be highly localized
VC syndication networks Risk sharing Portfolio selection Value-added Post-investment monitoring
IVC’s complementary knowledge is advantageous
First attemptA mix of IVC and CVC is useful for invested
companies’ performance
Shift of focus from network consequences to network formation
Divide into two papers: one on determinants of VC syndication network, and the other on the effects of network on firm performance
Second attemptMore: the effects of social networks (e.g.,
network positions)
Less: Network formation and network evolution
Research strategy: analogy CVC, IVC+CVC, CVC Hierarchy, network, market Concurrent make-and-buy decision
Theoretical contribution? Empirical contribution? Why interesting? So what?
Third attemptMore: the effects of social networks (e.g.,
network positions)
Less: Network formation and network evolution
Network formation Repeated ties Reciprocity Common third party
Research strategy: What has been ignored? Compare interpersonal and interorganizational Homophily
Homophily as an interorganizational networking principleHomophily at the interorganizational level
Why interesting? Taken-for-granted assumption: embeddedness
So what? Target: embeddedness cannot correctly depict
network structure or network evolution
Positioning Explaining “hybrid network”
Analytical strategy Comparing pure homophilious and heterophilous
network
Hypotheses generationCounter-intuitive starting point:
Hybrid network is costly….
Possible candidates Spatial uncertainty Industry distance Experience
Theory development Combine information economics and network
theory
Justify data and sample selection
A beautiful theory and inconvenient facts
Control of publicly traded companies in East Asia
Group affiliation around the world
Source: Khanna and Yafeh (2005)
Group heterogeneity around the world