TY  - JOUR
AU  - Chen,Henry
AU  - Gompers,Paul
AU  - Kovner,Anna
AU  - Lerner,Josh
TI  - Buy Local?  The Geography of Successful and Unsuccessful Venture Capital Expansion
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15102
PY  - 2009
Y2  - June 2009
UR  - http://www.nber.org/papers/w15102
L1  - http://www.nber.org/papers/w15102.pdf
N1  - Author contact info:
Henry Chen
Harvard Business School
Baker Library 280
Soldiers Field
Boston, MA 02163
Tel: 617-495-5981
E-Mail: hchen@hbs.edu

Paul Gompers
Harvard Business School
Baker Library 263
Soldiers Field
Boston, MA 02163
Tel: 617/495-6297
Fax: 617/496-8443
E-Mail: pgompers@hbs.edu

Anna Kovner
Financial Intermediation Function
Federal Reserve Bank of New York
33 Liberty Street
New York, NY 10045
E-Mail: Anna.Kovner@ny.frb.org

Josh Lerner
Harvard Business School
Rock Center 214
Boston, MA 02163
Tel: 617/495-6065
Fax: 617/496-7357
E-Mail: jlerner@hbs.edu
AB  - We document geographic concentration by both venture capital firms and venture capital-financed companies in three cities – San Francisco, Boston, and New York.  We find that firms open new satellite offices based on the success rate of venture capital-backed investments in an area.  Geography is also significantly related to outcomes.  Venture capital firms based in locales that are venture capital centers outperform, regardless of the stage of the investment.  Ironically, this outperformance arises from outsized performance outside of the venture capital firms’ office locations, including in peripheral locations. If the goal of state and local policy makers is to encourage venture capital investment, outperformance of non-local investments suggests that policy makers might want to mitigate costs associated with established venture capitalists investing in their geographies rather than encouraging the establishment of new venture capital firms
ER  -