CVC Involvement, Digital Transformation, and Risk-Taking of Investee Companies: Evidence from China

Lei Wang, Wenjing Chen and Yunbi An

Emerging Markets Finance and Trade, 2025, vol. 61, issue 6, 1630-1643

Abstract: This paper investigates the impact of corporate venture capital (CVC) involvement on digital transformation and the risk-taking behavior of investee companies. Based on data on manufacturing companies listed on the Small and Medium-sized Enterprise (SME) board and the Growth Enterprise Market (GEM) of the Shenzhen Stock Exchange from 2015 to 2022, we find that CVC involvement helps boost the risk-taking level of investee companies. This is because CVC promotes corporate digital transformation, which in turn enhances corporate risk-taking. Finally, we show that the promoting effect of CVC on corporate risk-taking is more pronounced for investee companies with a small size and investee companies with a high degree of operating leverage. Our findings provide novel evidence for the effect of CVC on corporate risk-taking in the digital age.

Date: 2025
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DOI: 10.1080/1540496X.2024.2422977

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