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Technological Diversification Through Corporate Venture Capital Investments: Creating Various Options to Strengthen Dynamic Capabilities

Year: 2015

Type: article

Abstract: Corporate venture capital (CVC) investment in technology-intensive entrepreneurial ventures has attracted increasing attention from established firms which recognize it as a useful learning investment strategy to create diversified technological options for future change. However, there is a lack of empirical research which examines the relationship between CVC investment and the corporate investors' technological diversification. In this study, we investigate the effects of CVC investments on corporate investors' technological diversity by using 20 years of panel data from corporate investors in five high-tech industries. As a result, we find that the total amount of CVC investments and the industrial diversity of portfolio companies exhibit curvilinear (inverted U-shape) relationships with the corporate investors' technological diversity. Moreover, the empirical results show that the absorptive capacity of corporate investors positively moderates the effects of CVC investments on the technological diversity.

Source: Industry and Innovation

DOI: 10.1080/13662716.2015.1054128

Authors: Simon U. Lee, Jina Kang

Institution: Seoul National University

Language: English

Topic: Private Equity and Venture Capital

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Industry, innovation and infrastructure

Open Access status: hybrid

Funder: National Institute of Standards and Technology