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Towards understanding who makes corporate venture capital investments and why

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  • Basu, Sandip
  • Phelps, Corey
  • Kotha, Suresh
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    Abstract

    This study examines when established firms participate in corporate venture capital (CVC). We build on the resource-based view of interfirm collaboration and emphasize the strategic flexibility of CVC relationships. We use longitudinal data on 477 firms from 1990 to 2000 to test our hypotheses. We find that firms in industries with rapid technological change, high competitive intensity and weak appropriability engage in greater CVC activity. We also show that firms that possess strong technological and marketing resources and resources developed from diverse venturing experience engage in greater CVC activity. Finally, we find that these firm resources moderate the influence of the observed industry effects in paradoxical ways.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Business Venturing.

    Volume (Year): 26 (2011)
    Issue (Month): 2 (March)
    Pages: 153-171

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    Handle: RePEc:eee:jbvent:v:26:y:2011:i:2:p:153-171

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    Web page: http://www.elsevier.com/locate/jbusvent

    Related research

    Keywords: Corporate venture capital Corporate entrepreneurship Interfirm collaboration;

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    Cited by:
    1. Bing Guo & Yun Lou & David Pérez-Castrillo, 2012. "Investment, Duration, and Exit Strategies for Corporate and Independent Venture Capital-backed Start-ups," UFAE and IAE Working Papers, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) 895.12, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    2. Svetlana Ledyaeva & Päivi Karhunen & John Whalley, 2013. "If Foreign Investment Is not Foreign: Round-Trip Versus Genuine Foreign Investment in Russia," Working Papers, CEPII research center 2013-05, CEPII research center.
    3. Sahaym, Arvin & Treviño, Len J. & Steensma, H. Kevin, 2012. "The influence of managerial discretion, innovation and uncertainty on export intensity: A real options perspective," International Business Review, Elsevier, Elsevier, vol. 21(6), pages 1131-1147.
    4. Ledyaeva, Svetlana & Karhunen, Päivi & Kosonen, Riitta, 2013. "Birds of a feather: Evidence on commonality of corruption and democracy in the origin and location of foreign investment in Russian regions," European Journal of Political Economy, Elsevier, Elsevier, vol. 32(C), pages 1-25.
    5. Svetlana Ledyaeva & Päivi Karhunen & John Whalley, 2013. "Offshore jurisdictions (including Cyprus), corruption money laundering and Russian round-trip investment," NBER Working Papers 19019, National Bureau of Economic Research, Inc.

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