IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v118y2020icp378-388.html
   My bibliography  Save this article

When corporations get disruptive, the disruptive get corporate: Financing disruptive technologies through corporate venture capital

Author

Listed:
  • Rossi, Matteo
  • Festa, Giuseppe
  • Devalle, Alain
  • Mueller, Jens

Abstract

Disruptive technologies have been the foremost contributors to the digital revolution since the public introduction of the Internet, a process in constant evolution that has impacted the economic systems, the world of business, and the entrepreneurial competitiveness. In these changing scenarios, informal investors in the form of corporate venture capitalists (CVCs) have played a shattering role, exploring ground-breaking opportunities, exploiting organisational assets, and continuously looking for discriminating innovations. This study investigates the role of CVCs in backing digital technologies, analysing their financial strategies in supporting new, pioneering, and disruptive firms. The preliminary results of this research about intensity, continuity, focus on technology, and entrepreneurial behaviour of CVCs provide evidence of a correlation between numbers and amounts of deals, especially in the case of digital and potentially disruptive technologies (DTs). The results highlight CVCs’ different behaviours and financial strategies, which are not always in line with the parent firms’ business model.

Suggested Citation

  • Rossi, Matteo & Festa, Giuseppe & Devalle, Alain & Mueller, Jens, 2020. "When corporations get disruptive, the disruptive get corporate: Financing disruptive technologies through corporate venture capital," Journal of Business Research, Elsevier, vol. 118(C), pages 378-388.
    • Handle: RePEc:eee:jbrese:v:118:y:2020:i:c:p:378-388
    DOI: 10.1016/j.jbusres.2020.07.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296320304495
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2020.07.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. G. Scott Erickson & Helen N. Rothberg, 2012. "Intelligence in Action," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-03532-5.
    2. Bresciani, Stefano & Ferraris, Alberto & Del Giudice, Manlio, 2018. "The management of organizational ambidexterity through alliances in a new context of analysis: Internet of Things (IoT) smart city projects," Technological Forecasting and Social Change, Elsevier, vol. 136(C), pages 331-338.
    3. Thomas J. Chemmanur & Elena Loutskina & Xuan Tian, 2014. "Corporate Venture Capital, Value Creation, and Innovation," Review of Financial Studies, Society for Financial Studies, vol. 27(8), pages 2434-2473.
    4. Song Ma, 2020. "The Life Cycle of Corporate Venture Capital," Review of Financial Studies, Society for Financial Studies, vol. 33(1), pages 358-394.
    5. Gunawan, Dedy Darsono & Huarng, Kun-Huang, 2015. "Viral effects of social network and media on consumers’ purchase intention," Journal of Business Research, Elsevier, vol. 68(11), pages 2237-2241.
    6. Rialti, Riccardo & Zollo, Lamberto & Ferraris, Alberto & Alon, Ilan, 2019. "Big data analytics capabilities and performance: Evidence from a moderated multi-mediation model," Technological Forecasting and Social Change, Elsevier, vol. 149(C).
    7. Michel Ferrary, 2003. "Managing Disruptive Technologies Life Cycle By Externalizing The Research. Social Network And Corporate Venturing In The Silicon Valley," Post-Print hal-03233534, HAL.
    8. v. Alberti-Alhtaybat, Larissa & Al-Htaybat, Khaldoon & Hutaibat, Khalid, 2019. "A knowledge management and sharing business model for dealing with disruption: The case of Aramex," Journal of Business Research, Elsevier, vol. 94(C), pages 400-407.
    9. Matteo Rossi & Giuseppe Festa & Ludovico Solima & Simona Popa, 2017. "Financing knowledge-intensive enterprises: evidence from CVCs in the US," The Journal of Technology Transfer, Springer, vol. 42(2), pages 338-353, April.
    10. Ferreira, João J.M. & Fernandes, Cristina I. & Ferreira, Fernando A.F., 2019. "To be or not to be digital, that is the question: Firm innovation and performance," Journal of Business Research, Elsevier, vol. 101(C), pages 583-590.
    11. Simon U. Lee & Jina Kang, 2015. "Technological Diversification Through Corporate Venture Capital Investments: Creating Various Options to Strengthen Dynamic Capabilities," Industry and Innovation, Taylor & Francis Journals, vol. 22(5), pages 349-374, July.
    12. Giuseppe Festa & Gerardino Metallo & Maria Teresa Cuomo & Mario Situm, 2019. "Crowdfunding in wine business as financing opportunity for smaller wineries," International Journal of Globalisation and Small Business, Inderscience Enterprises Ltd, vol. 10(3), pages 278-292.
    13. Matt, C. & Hess, Thomas & Benlian, Alexander, 2015. "Digital Transformation Strategies," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 75002, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    14. Christian Matt & Thomas Hess & Alexander Benlian, 2015. "Digital Transformation Strategies," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 57(5), pages 339-343, October.
    15. David Benson & Rosemarie H. Ziedonis, 2009. "Corporate Venture Capital as a Window on New Technologies: Implications for the Performance of Corporate Investors When Acquiring Startups," Organization Science, INFORMS, vol. 20(2), pages 329-351, April.
    16. Dushnitsky, Gary & Lenox, Michael J., 2006. "When does corporate venture capital investment create firm value?," Journal of Business Venturing, Elsevier, vol. 21(6), pages 753-772, November.
    17. Vikas Gupta & Asha Thomas, 2019. "Fostering tacit knowledge sharing and innovative work behaviour: an integrated theoretical view," International Journal of Managerial and Financial Accounting, Inderscience Enterprises Ltd, vol. 11(3/4), pages 320-346.
    18. Sabat, Hemant Kumar, 0. "The evolving mobile wireless value chain and market structure," Telecommunications Policy, Elsevier, vol. 26(9-10), pages 505-535, October.
    19. Matt, C. & Hess, Thomas & Benlian, Alexander, 2015. "Digital Transformation Strategies," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 75202, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    20. Vareska Van de Vrande & Wim Vanhaverbeke, 2013. "How Prior Corporate Venture Capital Investments Shape Technological Alliances: A Real Options Approach," Entrepreneurship Theory and Practice, , vol. 37(5), pages 1019-1043, September.
    21. Margherita Pagani & Catherine Pardo, 2017. "The impact of digital technology on relationships in a business network," Post-Print hal-02312032, HAL.
    22. Matteo Rossi & Elvira Martini, 2019. "Venture capitalists and value creation: the role of informal investors in the growth of smaller European firms," International Journal of Globalisation and Small Business, Inderscience Enterprises Ltd, vol. 10(3), pages 233-247.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Soh Young In & Ashby H. B. Monk & Janelle Knox-Hayes, 2020. "Financing Energy Innovation: The Need for New Intermediaries in Clean Energy," Sustainability, MDPI, vol. 12(24), pages 1-25, December.
    2. Benkraiem, Ramzi & Dubocage, Emmanuelle & Lelong, Yann & Shuwaikh, Fatima, 2023. "The effects of environmental performance and green innovation on corporate venture capital," Ecological Economics, Elsevier, vol. 210(C).
    3. Anca Elena Lungu & Ioana Andreea Bogoslov & Eduard Alexandru Stoica & Mircea Radu Georgescu, 2021. "From Decision to Survival—Shifting the Paradigm in Entrepreneurship during the COVID-19 Pandemic," Sustainability, MDPI, vol. 13(14), pages 1-23, July.
    4. Tat Dat Bui & Mohd Helmi Ali & Feng Ming Tsai & Mohammad Iranmanesh & Ming-Lang Tseng & Ming K Lim, 2020. "Challenges and Trends in Sustainable Corporate Finance: A Bibliometric Systematic Review," JRFM, MDPI, vol. 13(11), pages 1-26, October.
    5. Douglas Cumming & Satish Kumar & Weng Marc Lim & Nitesh Pandey, 2023. "Mapping the venture capital and private equity research: a bibliometric review and future research agenda," Small Business Economics, Springer, vol. 61(1), pages 173-221, June.
    6. Rossi, Matteo & Chouaibi, Jamel & Graziano, Domenico & Festa, Giuseppe, 2022. "Corporate venture capitalists as entrepreneurial knowledge accelerators in global innovation ecosystems," Journal of Business Research, Elsevier, vol. 142(C), pages 512-523.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Siachou, Evangelia & Vrontis, Demetris & Trichina, Eleni, 2021. "Can traditional organizations be digitally transformed by themselves? The moderating role of absorptive capacity and strategic interdependence," Journal of Business Research, Elsevier, vol. 124(C), pages 408-421.
    2. Scuotto, V & Nicotra, M. & Del Giudice, M. & Krueger, N. & Gregori, G.L., 2021. "A microfoundational perspective on SMEs’ growth in the digital transformation era," Journal of Business Research, Elsevier, vol. 129(C), pages 382-392.
    3. Zahoor, Nadia & Zopiatis, Anastasios & Adomako, Samuel & Lamprinakos, Grigorios, 2023. "The micro-foundations of digitally transforming SMEs: How digital literacy and technology interact with managerial attributes," Journal of Business Research, Elsevier, vol. 159(C).
    4. Jiang, Kangqi & Du, Xinyi & Chen, Zhongfei, 2022. "Firms' digitalization and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 82(C).
    5. Singh, Shiwangi & Sharma, Meenakshi & Dhir, Sanjay, 2021. "Modeling the effects of digital transformation in Indian manufacturing industry," Technology in Society, Elsevier, vol. 67(C).
    6. Tortora, Debora & Chierici, Roberto & Farina Briamonte, Massimiliano & Tiscini, Riccardo, 2021. "‘I digitize so I exist’. Searching for critical capabilities affecting firms’ digital innovation," Journal of Business Research, Elsevier, vol. 129(C), pages 193-204.
    7. Usai, A. & Fiano, F. & Messeni Petruzzelli, A. & Paoloni, P. & Farina Briamonte, M. & Orlando, B., 2021. "Unveiling the impact of the adoption of digital technologies on firms’ innovation performance," Journal of Business Research, Elsevier, vol. 133(C), pages 327-336.
    8. Eller, Robert & Alford, Philip & Kallmünzer, Andreas & Peters, Mike, 2020. "Antecedents, consequences, and challenges of small and medium-sized enterprise digitalization," Journal of Business Research, Elsevier, vol. 112(C), pages 119-127.
    9. Shuwaikh, Fatima & Dubocage, Emmanuelle, 2022. "Access to the Corporate Investors' Complementary Resources: A Leverage for Innovation in Biotech Venture Capital-Backed Companies," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    10. Rossi, Matteo & Chouaibi, Jamel & Graziano, Domenico & Festa, Giuseppe, 2022. "Corporate venture capitalists as entrepreneurial knowledge accelerators in global innovation ecosystems," Journal of Business Research, Elsevier, vol. 142(C), pages 512-523.
    11. Patrick Haslanger & Erik E. Lehmann & Nikolaus Seitz, 2023. "The performance effects of corporate venture capital: a meta-analysis," The Journal of Technology Transfer, Springer, vol. 48(6), pages 2132-2160, December.
    12. Chen, Zhongfei & Xiao, Yu & Jiang, Kangqi, 2023. "The impact of tax reform on firms' digitalization in China," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    13. Ponzoa, José M. & Gómez, Andrés & Mas, José M., 2023. "EU27 and USA institutions in the digital ecosystem: Proposal for a digital presence measurement index," Journal of Business Research, Elsevier, vol. 154(C).
    14. Antonio Farías & Christian A. Cancino, 2021. "Digital Transformation in the Chilean Lodging Sector: Opportunities for Sustainable Businesses," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    15. Piepponen, Amanda & Ritala, Paavo & Keränen, Joona & Maijanen, Päivi, 2022. "Digital transformation of the value proposition: A single case study in the media industry," Journal of Business Research, Elsevier, vol. 150(C), pages 311-325.
    16. Li, Ganglei & Shao, Yunfei, 2023. "How do top management team characteristics affect digital orientation? Exploring the internal driving forces of firm digitalization," Technology in Society, Elsevier, vol. 74(C).
    17. Shuhao Liang & Tingting Li, 2022. "Can Digital Transformation Promote Innovation Performance in Manufacturing Enterprises? The Mediating Role of R&D Capability," Sustainability, MDPI, vol. 14(17), pages 1-20, September.
    18. Aristides Papathomas & George Konteos, 2022. "Digital Transformation Journey for Incumbent Banks: The Case Study of Greece," International Journal of Marketing Studies, Canadian Center of Science and Education, vol. 14(2), pages 1-13, December.
    19. Jeon, Euiju & Maula, Markku, 2022. "Progress toward understanding tensions in corporate venture capital: A systematic review," Journal of Business Venturing, Elsevier, vol. 37(4).
    20. Verhoef, Peter C. & Broekhuizen, Thijs & Bart, Yakov & Bhattacharya, Abhi & Qi Dong, John & Fabian, Nicolai & Haenlein, Michael, 2021. "Digital transformation: A multidisciplinary reflection and research agenda," Journal of Business Research, Elsevier, vol. 122(C), pages 889-901.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:118:y:2020:i:c:p:378-388. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.