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Corporate Venture Capital Diversification, Parent Company Value Spillovers And Value Creation Of Start-Ups

Author

Listed:
  • LEI WANG

    (School of Business, Jiangnan University, Wuxi, Jiangsu 214122, P. R. China)

  • YE YANG

    (School of Business, Jiangnan University, Wuxi, Jiangsu 214122, P. R. China)

  • YUNBI AN

    (��Odette School of Business, University of Windsor, Windsor, Ontario N9B 3P4, Canada)

Abstract

Corporate venture capital (CVC) not only promotes value creation for CVC parent companies but also brings rich entrepreneurial resources to invested start-ups. This paper explores the mechanisms through which CVC portfolio diversification promotes value creation for both parent companies as well as the invested start-ups. Focusing on 142 start-ups in China from 2003 to 2015, invested in by 49 companies listed on the Shanghai and Shenzhen Main Boards, we find that CVC portfolio diversification has a positive impact on the value of invested start-ups and CVC parent company value spillovers play a mediating role in this effect. In addition, CVC portfolio diversification has a nonlinear U-shaped relationship with the value of parent companies. Finally, geographical proximity between parent companies and their invested start-ups renders a significant reciprocal positive moderating effect on the relationship between CVC diversification and the value of parent companies, as well as the relationship between the value of parent companies and the value of invested start-ups.

Suggested Citation

  • Lei Wang & Ye Yang & Yunbi An, 2025. "Corporate Venture Capital Diversification, Parent Company Value Spillovers And Value Creation Of Start-Ups," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 70(03), pages 617-645, June.
    • Handle: RePEc:wsi:serxxx:v:70:y:2025:i:03:n:s021759082150020x
    DOI: 10.1142/S021759082150020X
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    More about this item

    Keywords

    Corporate venture capital; portfolio diversification; enterprise value; geographical proximity;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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