Technology Disclosure and Corporate Venture Capital Investments

49 Pages Posted: 16 Feb 2016 Last revised: 18 Apr 2018

See all articles by Ali Mohammadi

Ali Mohammadi

Copenhagen Business School - Department of Strategy and Innovation; KTH Royal Institute of Technology

Pooyan Khashabi

Ludwig Maximilian University of Munich - Institute for Strategy, Technology and Organization (ISTO)

Date Written: April 24, 2017

Abstract

We investigate how technology disclosure drives the formation of investment relations between startups and corporate venture capitals (CVC). On the one hand, technology disclosure enables CVCs to evaluate startups better, make less risky investment decisions and thus, increases the likelihood of investment relations. On the other hand, such disclosure may satisfy the technology-acquisition objectives of CVCs, reducing CVCs willingness to form an investment relation after disclosure. We exploit the American Inventor’s Protection Act as an exogenous change to high-tech startups’ technology disclosure through their patent documents. The results show that technology disclosure increases the likelihood of investment relations between startups and CVCs. The effect is stronger in environments with more information constraints between startups and CVC.

Keywords: corporate venture capital, startup, investment relation, disclosure, information constraint, misappropriation

JEL Classification: G14, L26, M13, O32

Suggested Citation

Mohammadi, Ali and Khashabi, Pooyan, Technology Disclosure and Corporate Venture Capital Investments (April 24, 2017). Available at SSRN: https://ssrn.com/abstract=2732710 or http://dx.doi.org/10.2139/ssrn.2732710

Ali Mohammadi (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilen
Frederiksberg, 2000
Denmark

KTH Royal Institute of Technology ( email )

Stockholm
Sweden

Pooyan Khashabi

Ludwig Maximilian University of Munich - Institute for Strategy, Technology and Organization (ISTO) ( email )

Kaulbachstr, 45
Munich, 80539
Germany
+49 89 2180 5415 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
276
rank
107,712
Abstract Views
944
PlumX Metrics