Abstract

http://ssrn.com/abstract=1364213
 
 

References (63)



 
 

Citations (12)



 


 



Corporate Venture Capital, Value Creation, and Innovation


Thomas J. Chemmanur


Boston College - Carroll School of Management

Elena Loutskina


University of Virginia - Darden School of Business

Xuan Tian


Indiana University - Kelley School of Business

November 5, 2013

Forthcoming, Review of Financial Studies

Abstract:     
We analyze how corporate venture capital (CVC) differs from independent venture capital (IVC) in nurturing innovation in entrepreneurial firms. We find that CVC-backed firms are more innovative, as measured by their patenting outcome, although they are younger, riskier, and less profitable than IVC-backed firms. Our baseline results continue to hold in a propensity-score-matching analysis of IPO firms and a difference-in-differences analysis of the universe of VC-backed entrepreneurial firms. We present evidence consistent with two possible underlying mechanisms: CVCs’ greater industry knowledge due to the technological fit between their parent firms and entrepreneurial firms and CVCs’ greater tolerance for failure.

Number of Pages in PDF File: 49

Keywords: Innovation, Corporate Venture Capital, Value Creation, Patents, Citations

JEL Classification: G24, G23, O31

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Date posted: March 23, 2009 ; Last revised: December 20, 2013

Suggested Citation

Chemmanur, Thomas J. and Loutskina, Elena and Tian, Xuan, Corporate Venture Capital, Value Creation, and Innovation (November 5, 2013). Forthcoming, Review of Financial Studies. Available at SSRN: http://ssrn.com/abstract=1364213 or http://dx.doi.org/10.2139/ssrn.1364213

Contact Information

Thomas J. Chemmanur
Boston College - Carroll School of Management ( email )
440 Fulton Hall
Boston College
Chestnut Hill, MA 02467-3808
United States
617-552-3980 (Phone)
617-552-0431 (Fax)
Elena Loutskina
University of Virginia - Darden School of Business ( email )
P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-243-4031 (Phone)
Xuan Tian (Contact Author)
Indiana University - Kelley School of Business ( email )
1309 E. Tenth Street
Bloomington, IN 47405
United States
812-8553420 (Phone)
824-8555875 (Fax)
HOME PAGE: http://kelley.iu.edu/tianx
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