IFI Technology Governance/STIG PoP Seminar “Institutional Support for Growth and VC Investment in Established vs. Emerging sectors: Lessons from CHIPS and Science Act”

Although it is well known that increasing institutional support promotes the entry and growth of startups, less is discussed about its impact on intermediaries (e.g., VC firms) as part of the entrepreneurial ecosystem. From the perspective of a regulatory pillar in institutionalism, this study investigates how adopting the new law for sector growth affects VC firms’ investment strategy in its early period, facing the dilemma of cherry-picking in the stable established sector vs. frog-kissing in the highly ambiguous emerging sector. Using the quarterly data of entire U.S. VC firms, 2020 August -2023 February, we test how the U.S. government’s enactment of the CHIPS and Science Act for revitalizing the semiconductor industry (established sector) and supporting key technology areas (emerging sector) affects the VC firms’ investment in these two sectors differently. Our results show that the enactment leads VC firms to increase investing in the established sector while reducing investment in the emerging sector. The opposite pattern happens mainly because, despite the regulatory favors, incomplete institutionalization during the early regulatory changes becomes additional source of ambiguity in emerging sector, further increasing investment risk. Furthermore, we find that VC firms’ political embeddedness amplifies the benefits of investing in the established sector, whereas their reputation (ability to deliver high returns) mitigates investment risks in certain technology areas in the emerging sector. Taken together, our study contributes to the institutionalism and entrepreneurship literature by suggesting how institutional support in its early period affects intermediaries’ strategy differently depending on the sector types.

2024.03.25（Mon.） 10:00-11:30 (JST)

Seminar Room E, 12th floor, International Academic Research building, The University of Tokyo (Hongo)
＊On-site event

東京大学本郷キャンパス 国際学術総合研究棟12階 演習室E
＊対面開催（オンライン配信はありません）

Chuck Eesley,
Associate Professor
W.M. Keck Foundation Faculty Scholar
Management Science & Engineering Department
Stanford Technology Ventures Program

English

Advance registration is required. (Move to the host IFI page)
https://ifi.u-tokyo.ac.jp/en/event/12396/

要事前申込み（以下の東京大学未来ビジョン研究センターのWEBページ上のフォームよりご応募ください）
https://ifi.u-tokyo.ac.jp/event/17412/

Host：
Institute for Future Initiatives, The University of Tokyo（東京大学未来ビジョン研究センター技術ガバナンス研究ユニット）

Co-host：
Science, Technology and Innovation Governance (STIG) Program, UTokyo（東京大学科学技術イノベーション政策の科学(STIG)教育・研究ユニット）

Contact/お問合せ：
Secretariat, Institute for Future Initiatives, UTokyo
Technology Governance Policy Research Unit
E-mail: ifi_tg[at]ifi.u-tokyo.ac.jp（replace [at] with @）

東京大学 未来ビジョン研究センター
技術ガバナンスユニット事務局
E-mail ifi_tg[at]@ifi.u-tokyo.ac.jp ([at]→@に置き換えてください)