Internal Knowledge Development and External Knowledge Access in Venture Capital Investment Performance

28 Pages Posted: 16 Apr 2008

See all articles by Dirk De Clerq

Dirk De Clerq

Brock University - Faculty of Business

Dimo Dimov

University of Bath

Multiple version iconThere are 2 versions of this paper

Abstract

We examine the performance effects of two knowledge-driven strategies internal knowledge development and external knowledge access through inter-firm relationships in the context of venture capital investing. Using longitudinal data on the investments, syndication, and performance of 200 US-based venture capital firms, we find that investing in industries in which a firm has more knowledge and investing with more or familiar external partners enhances investment performance. In addition, we reveal important interactions between the two strategies, such that access to external knowledge is particularly beneficial when the investment exposes gaps in the firm's own expertise. Thus, access to external knowledge is more effective when an incongruity exists between what the firm knows and what it intends to do. We discuss the study's implications for organizational knowledge and learning, strategic alliance, and venture capital literature.

Suggested Citation

De Clercq, Dirk and Dimov, Dimo, Internal Knowledge Development and External Knowledge Access in Venture Capital Investment Performance. Journal of Management Studies, Vol. 45, Issue 3, pp. 585-612, May 2008. Available at SSRN: https://ssrn.com/abstract=1121085 or http://dx.doi.org/10.1111/j.1467-6486.2007.00747.x

Dirk De Clercq (Contact Author)

Brock University - Faculty of Business ( email )

St. Catharines, Ontario L2S 3A1
Canada

Dimo Dimov

University of Bath ( email )

Claverton Down
Bath, BA2 7AY
United Kingdom

HOME PAGE: http://dimodimov.me

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