Towards Understanding Who Makes Corporate Venture Capital Investments and Why

44 Pages Posted: 11 Jul 2009 Last revised: 28 Feb 2015

See all articles by Sandip Basu

Sandip Basu

City University of New York - Narendra Paul Loomba Department of Management

Corey C. Phelps

McGill University

Suresh Kotha

Foster School of Business

Date Written: July 10, 2009

Abstract

This study examines when established firms participate in corporate venture capital (CVC). We build on the resource-based view of interfirm collaboration and emphasize the strategic flexibility of CVC relationships. We use longitudinal data on 477 firms from 1990-2000 to test our hypotheses. We find that firms in industries with rapid technological change, high competitive intensity and weak appropriability engage in greater CVC activity. We also show that firms that possess strong technological and marketing resources and resources developed from diverse venturing experience engage in greater CVC activity. Finally, we find that these firm resources moderate the influence of the observed industry effects in paradoxical ways.

Keywords: corporate venture capital, corporate entrepreneurship, interfirm collaboration

JEL Classification: M13, L14, G24, D83, C33

Suggested Citation

Basu, Sandip and Phelps, Corey C. and Kotha, Suresh, Towards Understanding Who Makes Corporate Venture Capital Investments and Why (July 10, 2009). Journal of Business Venturing, Forthcoming. Available at SSRN: https://ssrn.com/abstract=979017

Sandip Basu

City University of New York - Narendra Paul Loomba Department of Management ( email )

NY
United States

Corey C. Phelps (Contact Author)

McGill University ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5
Canada

Suresh Kotha

Foster School of Business ( email )

University of Washington
Seattle, WA
United States
206-543-4466 (Phone)
206-683-9392 (Fax)

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