1. ¹Babson College, Arthur M Blank Center for Entrepreneurship, Babson Park, MA, USA
2. ²Hankamer School of Business, Baylor University, Waco, USA
3. ³Kelley School of Business, Indiana University, Bloomington, USA

Correspondence: AL Zacharakis, Babson College, Arthur M Blank Center for Entrepreneurship, 231 Forest Street, Babson Park, MA 02457, USA. Tel: +1 781 239 4497; Fax: +1 781 239 4178; E-mail: Zacharakis@Babson.edu

Received 30 September 2003; Revised 22 May 2006; Accepted 19 November 2006; Published online 7 June 2007.

Abstract

This paper examines the influence of economic institutions upon venture capitalists' (VCs) decision policies. We conducted policy-capturing experiments on 119 VCs across three countries, representing distinct economic institutions (US, mature market economy; South Korea, emerging economy; and China, transitional economy). Results show that VCs in rules-based market economies (US) rely upon market information to a greater extent than VCs in emerging economies (Korea), and Chinese VCs (transitional economy) weight human capital factors more heavily than either US or Korean VCs. Findings suggest that, although professional institutions may dictate which information is included in VC decision policies, the extent to which that information is emphasized is determined partly by the economic institution in which the decision-maker operates.