Financial openness in an emerging-market entrepreneurial ecosystem: How foreign and domestic capital structure Thailand's startup financing, 2015–2025

Information from the abstract

The financing of entrepreneurial ecosystems is increasingly open: external, often foreign, capital flows into local entrepreneurial ecosystems, yet how the openness of an emerging-market investor base is structured within the ecosystem is poorly understood. We treat investor origin as one observable structural dimension of entrepreneurial-ecosystem openness, specifically the financial openness of the ecosystem's financing layer, and use 1,553 completed entrepreneurial-finance deals in Thailand over 2015 to 2025 (993 classifiable by origin) from PitchBook, linking firms, deals, and investors, to examine how origin relates to deal size, funding stage, syndicate structure, and valuation. Foreign-backed and mixed-syndicate deals associate with substantially larger deals than purely domestic ones (66 and 82 percent larger; regression n = 246), a pattern robust to industry and year fixed effects and alternative origin definitions, and similar in magnitude when accelerator rounds are excluded; the mixed-origin difference is not independent of syndicate size. Origin also tracks funding stage: domestic capital concentrates in seed and accelerator rounds, whereas foreign and mixed capital are more prevalent in later-stage and private-equity deals, and half of all syndicated deals involve cross-origin financial co-participation by domestic and foreign investors. We find no detectable foreign valuation premium in a small, selective valuation subsample, and no monotonic lifecycle sorting. Results are associational. Openness is structured and selective rather than uniform, consistent with a liability-of-foreignness account nested within an entrepreneurial ecosystem: external capital is concentrated in larger, syndicated, later-stage deals, consistent with selective cross-border participation; the data do not directly identify information-cost, certification, or learning mechanisms.

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Related topics: Southeast Asian Sociopolitical Studies · International Business and FDI · Private Equity and Venture Capital