This paper examines how differences in distinct institutional clusters of countries impact on the vital entrepreneurial activity of venture capital, and how individuals, organizations, and their collective action in turn shape those institutions. The focus on venture capital offers researchers the opportunity to view an industry that comes from a common root, with strong and consistent traditions, in which to examine how the differing institutional settings impact on behaviors in different markets, and how the institutions themselves may change in these settings. We also focus on emerging economies, since such economies offer a natural laboratory to study the impact of institutional change. Specifically, this paper employs an institutional theory perspective to examine venture capital in two regions of the world that form institutional clusters of countries – Latin America and Asia.9 months ago It is found that the venture capital industry exhibits a strong consistency across many dimensions; yet institutions in these two distinct settings result in significant differences in industry practice. Therefore this research is able to contribute to both empirical and theoretical understanding of emerging economies, institutions in those environments, and venture capital.

1.For the purpose of this study, the countries of Latin America include Mexico, Brazil, Argentina, Guatemala, Costa Rica, and Colombia. Asia includes Hong Kong, Taiwan, Thailand, Singapore, Malaysia, Philippines, Myanmar, Viet Nam, and China. South and West Asia were not included in the sample because of the significant differences in culture and institutions in those regions.

2.Venture capital is typically associated with earlier-stage ventures in the more developed economies of the West, whereas “private equity” is typically seen as a more inclusive term that includes activities that involve more mature firms such as buyouts. The industry in Asia and Latin America is much younger and smaller: the term “venture capitalist” typically is used for individuals who head all types of private equity firm, and the term “venture capital” is used to refer to all types of private equity firm in Asia and Latin America.

3.In grounded theory, categories are thought to be saturated when additional data collection such as interviews adds little or no additional information to the existing categories, or fails to create new informational categories.


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This paper was previously presented to the Society for Entrepreneurial Scholars. Thanks are expressed to Michael Lubatkin, Tom Lee, and David Deeds for earlier comments on the manuscript, Singapore VC List and to Marc Ahlstrom of Burlington County College for his research assistance.

M J Neeley School of Business, Texas Christian University, Fort Worth, USA

Garry D Bruton

Department of The Chinese University of Hong Kong, Shatin, Hong Kong

David Ahlstrom

VA Tech Hydro Corporation, University Research Park, Charlotte, USA

Tomas Puky

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David AhlstromView author publications
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Correspondence to David Ahlstrom.

Accepted by Rosalie Tung, Area Editor, 21 September 2008. This paper has been with the authors for three revisions.

Bruton, G., Ahlstrom, D. & Puky, T. Institutional differences and the development of entrepreneurial ventures: A comparison of the venture capital industries in Latin America and Asia. J Int Bus Stud 40, 762-778 (2009).