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Corporate venture capital and firm productivity: Evidence from China

Author

Listed:
  • Wan, Liangyong
  • Sui, Xin
  • Rao, Jing
  • Deng, Lai

Abstract

Although existing literature emphasizes the strategic goals of corporate venture capital (CVC) investments, very few studies have empirically tested the impact of CVC investments on firm productivity. To narrow this gap, we investigated a sample of Chinese firms to find a significant and positive relationship between CVC investments and parent firms’ total factor productivity (TFP). CVC investments improve TFP by increasing technological innovation and resource allocation efficiency. More detailed tests indicate that syndicated CVC investments, CVC investments made by controlled CVC units, and industry-related CVC investments are more likely to improve TFP. Additionally, heterogeneity tests show that the positive effect of CVC investments on productivity is more prominent in non-state-owned firms, firms with lower opportunistic tendencies, and firms in less competitive industries. This work contributes to the empirical understanding of CVC performance in non-US markets where economic growth is driven largely by efficiency.

Suggested Citation

  • Wan, Liangyong & Sui, Xin & Rao, Jing & Deng, Lai, 2026. "Corporate venture capital and firm productivity: Evidence from China," Research in International Business and Finance, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:riibaf:v:81:y:2026:i:c:s0275531925004222
    DOI: 10.1016/j.ribaf.2025.103166
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    Keywords

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    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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