This article deals with the penetration of Venture Capital (VC) industry to a new geographical market and the changes that took place during its transition from the growth to the mature stage of development. We suggest that when VC industry enters a new geographical market, it will initially include very few, but extremely innovative agents. As the industry grows more agents enter the market, and it becomes on one hand more conservative and on the other more competitive. The first effect has a significant negative side effect - a decrease in industry innovativeness and barriers to industry renewal. We illustrate this argument using the Israeli case and present detailed quantitative analysis of the Israeli VC industry development between 1991 and 2007.
- Industry life cycle
- Regional cluster
- Venture capital
ASJC Scopus subject areas
- Management of Technology and Innovation