The ownership structure of corporate venture capital financing and innovation

Tao Wang

Technovation, 2023, vol. 123, issue C

Abstract: Previous empirical findings on the impact of corporate venture capital (CVC) investment on invested entrepreneurial companies' technological innovation are rather mixed. In this paper, I explore a key determinant of this relationship-the ownership structure of CVC firms. It is likely that the ownership structure of CVC firms also affects their ability to select portfolio companies. To address the selection bias of CVC firms, I use propensity score matching to compare private and public CVC-backed entrepreneurial companies. The results show that entrepreneurial companies that are backed by private CVC firms are more innovative than those that are backed by public CVC firms. In addition, I also explore the underlying mechanism and find that private CVC investors are more failure tolerant compared with public CVC investors and this leads to the superior ability in stimulating innovation performance.

Keywords: Corporate venture capital; Ownership structure; Technological innovation; Failure tolerance (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:techno:v:123:y:2023:i:c:s0166497223000470

DOI: 10.1016/j.technovation.2023.102736

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