Insights for sustainable business practices: Comparative impact of independent and corporate venture capital funding on financial and environmental performance

Fatima Shuwaikh, Agathe Tanguy, Emmanuelle Dubocage () and Othman Alolah
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Fatima Shuwaikh: EMLV - École de management Léonard de Vinci
Agathe Tanguy: Universidade Católica Portuguesa, Catolica Lisbon School of Business and Economics,
Emmanuelle Dubocage: IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - Université Gustave Eiffel
Othman Alolah: Imam Mohammad Ibn Saud University, Riyadh, Saudi Arabia

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Abstract: This study aims to analyze the effects of venture capital (VC) financing schemes on the financial and environmental performance of their VC-backed companies. This research leverages a dataset including 325 U.S. firms between 2002 and 2022 and examines two issues of interest: independent venture capital (IVC) and corporate venture capital (CVC) funding. The results show that IVC-backed companies have significantly better environmental, social, and governance (ESG) ratings and emit fewer greenhouse gases (GHG) emissions when compared to companies backed by CVC. This highlights that the function of IVC is to improve the environmental sustainability of businesses. Together this helps provide a valuable perspective about which VC models (CVC, IVC) does have an impact on how businesses pursue sustainability practices alongside financial performance. This paper contributes to the sustainable entrepreneurship literature by focusing on the importance of funding types with performing sustainable practices.

Keywords: Corporate; Venture; Capital; Independent; Venture; Capital; Environmental; Performance; Greenhouse; Gas; Emissions; ESG; Financial; Performance (search for similar items in EconPapers)
Date: 2025-01
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Published in Research in International Business and Finance, 2025, 73, pp.102632. ⟨10.1016/j.ribaf.2024.102632⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-04757199

DOI: 10.1016/j.ribaf.2024.102632

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