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The contribution of corporate ventures to radical innovation

Author

Listed:
  • Czarnitzki, Dirk
  • Dick, Johannes M. H.
  • Hussinger, Katrin

Abstract

Established firms often face significant obstacles to innovation. As a solution, it has been suggested to form corporate ventures. Based on a sample of corporate and independent ventures in German manufacturing, we show that corporate ventures are more innovative than the control group, i.e. the independent ventures. In particular, corporate ventures are more successful at developing radical innovations. This effect, however, decreases with the ventures' degree of ownership concentration. We conclude that corporate ventures with a high ownership concentration are more likely to be controlled and monitored by their corporate sponsors, resulting in less favorable conditions for radical innovation.

Suggested Citation

  • Czarnitzki, Dirk & Dick, Johannes M. H. & Hussinger, Katrin, 2010. "The contribution of corporate ventures to radical innovation," ZEW Discussion Papers 10-060, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:10060
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    Citations

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    Cited by:

    1. Johannes Dick & Katrin Hussinger & Boris Blumberg & John Hagedoorn, 2013. "Is success hereditary? Evidence on the performance of spawned ventures," Small Business Economics, Springer, vol. 40(4), pages 911-931, May.
    2. Heger, Diana & Hussinger, Katrin, 2013. "External capital access and new product launch in start-up firms with uncertain intellectual property rights," ZEW Discussion Papers 13-095, ZEW - Leibniz Centre for European Economic Research.
    3. Nabil Abou Lebdi,, 2015. "Radical Innovation – A domain of SMEs? A novel test of the Schumpeterian Hypothesis," DEM Discussion Paper Series 15-04, Department of Economics at the University of Luxembourg.
    4. Nabil Abou Lebdi & Katrin Hussinger, 2016. "Startup Innovation during the Past Economic Crisis," DEM Discussion Paper Series 16-27, Department of Economics at the University of Luxembourg.

    More about this item

    Keywords

    corporate entrepreneurship; start-ups; radical innovation;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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