Abstract

http://ssrn.com/abstract=2340900
 


 



Corporate Governance in Entrepreneurial Firms: Effects of Corporate Venture Capital and Founder Incumbency on R&D Investment Strategy


Heejin Woo


University of Southern California - Marshall School of Business

Yongwook Paik


University of Southern California - Marshall School of Business

March 1, 2014


Abstract:     
R&D investment strategy is one of the most important resource allocation decisions that investors and top-level managers make, and it is particularly important for young entrepreneurial firms in technology-intensive industries. Although prior studies have examined how different types of ownership affect R&D investment strategy in large public corporations, we still know little about corporate governance-related determinants of R&D investment strategy in young entrepreneurial firms. To fill this research gap, we focus on the most significant stakeholders in young entrepreneurial firms (i.e., venture capital firms, corporate venture capital firms, and founders) and argue that CVC ownership and founder incumbency positively affect R&D investment strategy in entrepreneurial firms. Our empirical analysis correcting for selection bias and reverse causality supports our hypotheses.

Number of Pages in PDF File: 43

Keywords: corporate governance, R&D investment, corporate venture capital, founder, entrepreneurship

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Date posted: October 16, 2013 ; Last revised: May 31, 2014

Suggested Citation

Woo, Heejin and Paik, Yongwook, Corporate Governance in Entrepreneurial Firms: Effects of Corporate Venture Capital and Founder Incumbency on R&D Investment Strategy (March 1, 2014). Available at SSRN: http://ssrn.com/abstract=2340900 or http://dx.doi.org/10.2139/ssrn.2340900

Contact Information

Heejin Woo
University of Southern California - Marshall School of Business ( email )
701 Exposition Blvd
Los Angeles, CA 90089
United States
Yongwook Paik (Contact Author)
University of Southern California - Marshall School of Business ( email )
701 Exposition Blvd
Los Angeles, CA 90089
United States

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