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Technological fit and innovation of CVC-backed enterprises within the industry chain: The moderating role of trust

Author

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  • Lu, Xikai
  • Wang, Lei
  • Chen, Wenjing
  • An, Yunbi

Abstract

This paper investigates the impacts of bilateral technological fit between corporate venture capital (CVC) parent companies and CVC-backed startups within the industry chain on the startups’ innovation performance. Using data from listed companies on China’s ChiNext Board, we find that technological fit between a CVC parent and its portfolio startup is nonlinearly related to the startup’s innovation performance. Specifically, there is a U-shaped relationship between bilateral technological fit and the startup’s innovation performance. When the startup is located downstream in the CVC industry chain, the effect of technological fit is stronger, whereas when the startup is located upstream of the CVC parent company, bilateral technological fit and the startup’s innovation performance exhibit an inverted U-shaped relationship. In addition, mutual trust between the two parties positively moderates this relationship. Further analysis shows that bilateral technological fit affects the startup’s innovation performance through the resource endowment and governance effects associated with CVC investment. Finally, the nonlinear relationship between bilateral technological fit and innovation is more pronounced among startups with greater technological innovation asset accumulation, operating in more competitive industries, and located in regions with stronger intellectual property protection.

Suggested Citation

  • Lu, Xikai & Wang, Lei & Chen, Wenjing & An, Yunbi, 2026. "Technological fit and innovation of CVC-backed enterprises within the industry chain: The moderating role of trust," Economic Analysis and Policy, Elsevier, vol. 90(C), pages 1325-1346.
    • Handle: RePEc:eee:ecanpo:v:90:y:2026:i:c:p:1325-1346
    DOI: 10.1016/j.eap.2026.02.021
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