Geographic distance between venture capitalists and target firms and the value of quality signals
研究发现，当风险投资家与生物技术企业距离较远时，专利活动和创始团队经验等质量信号更能吸引投资，因为远距离交易信息不对称更高。
In this paper, we examine whether the value of quality signals (patent activity and founding team characteristics) transmitted by emerging biotechnology firms is influenced by the geographic distance between venture capitalists and biotechnology firms. In line with the notion that signals are more valuable to receivers in environments of elevated information asymmetries and under the premise that long-distance transactions present such an environment, we empirically reveal that patent activity and founding team entrepreneurial experience are more effective in increasing venture capital investments when the distance between investors and investees is elevated. Our results, therefore, corroborate the rationale that because tacit knowledge circulates mostly within local circles, it diminishes the value of signals for local transactions, as a priori knowledge about potential target firms is more easily assessed by investors. Our study contributes to the literature on the factors that drive the value of signals, on the literature that studies the function of patents and other forms of intellectual property as a means to boost firm performance, and on the literature on the geography of venture capital investments. \n \n