The globalization of East Asian venture capital: how its ‘return diffusion’ is affecting Silicon Valley

TY - JOUR

T1 - The globalization of East Asian venture capital: how its ‘return diffusion’ is affecting Silicon Valley

AU - Klingler-Vidra, Robyn

AU - Pacheco Pardo, Ramon

PY - 2025/9/1

Y1 - 2025/9/1

N2 - The global financial system’s investment in high-technology startups is exemplified bySilicon Valley venture capital (VC). While Silicon Valley remains a leading hub of VCactivity worldwide, its norms and practices have evolved since its World War II origins, especially with the internationalization of VC in the 21st century. This article offers a novel explanation for these changes by analysing East Asian governments’ policy for internationalizing VC activity, Silicon Valley VC co-investment data, and media coverage of key Silicon Valley VC managers. We argue that ‘return diffusion’ from East Asia—defined as the practice of grafting a diffused object back onto the source model—has played a role in shaping the evolution of Silicon Valley VC. The collaboration and coexistence of Chinese, Japanese, Korean, and Taiwanese actors have contributed to the growing prominence of corporate investors, increased valuations and fund sizes, and heightened national security concerns among core Silicon Valley VC managers. In so doing, this article contributes to the special issue’s exploration of how East Asia’s growing influence in global financial markets is shaping, rather than merely following, the liberal economic order, even the quintessentially liberal Silicon Valley VC market.

AB - The global financial system’s investment in high-technology startups is exemplified bySilicon Valley venture capital (VC). While Silicon Valley remains a leading hub of VCactivity worldwide, its norms and practices have evolved since its World War II origins, especially with the internationalization of VC in the 21st century. This article offers a novel explanation for these changes by analysing East Asian governments’ policy for internationalizing VC activity, Silicon Valley VC co-investment data, and media coverage of key Silicon Valley VC managers. We argue that ‘return diffusion’ from East Asia—defined as the practice of grafting a diffused object back onto the source model—has played a role in shaping the evolution of Silicon Valley VC. The collaboration and coexistence of Chinese, Japanese, Korean, and Taiwanese actors have contributed to the growing prominence of corporate investors, increased valuations and fund sizes, and heightened national security concerns among core Silicon Valley VC managers. In so doing, this article contributes to the special issue’s exploration of how East Asia’s growing influence in global financial markets is shaping, rather than merely following, the liberal economic order, even the quintessentially liberal Silicon Valley VC market.

KW - Silicon Valley

KW - Venture Capital

KW - East Asia

M3 - Article

SN - 0020-5850

JO - International Affairs

JF - International Affairs

ER -