Moderating Factors in Distant Investment of Corporate Venture Capital
AbstractThe role of venture capital as mediator and gatekeeper is well acknowledged and geographical barriers for open innovation have been questioned, but venture capital firms’ distant investments have been investigated only rarely. The strategic benefits accrued from corporate venture capital (CVC) investment depend on the selection of target ventures. Prior research, however, overlooked the incurred information cost for identifying a potential target. Considering that innovative ventures often reside in distant locations, this paper aims to investigate what factors alleviate the information cost for CVCs when identifying target ventures in distant locations. We expect a CVC’s target selection in distant locations will be limited to the ventures under a tight appropriability regime, ventures within the same industries as a CVC’s business units, and ventures with pre-existing investors that a CVC has prior ties with. The hypotheses are tested with the data on CVC investments in the U.S. between 2006 and 2013. The results empirically support the hypotheses. View Full-Text
- Supplementary File 1:
ZIP-Document (ZIP, 10 KB)
Share & Cite This Article
Kang, S.; Hwang, J. Moderating Factors in Distant Investment of Corporate Venture Capital. J. Open Innov. Technol. Mark. Complex. 2019, 5, 19.
Kang S, Hwang J. Moderating Factors in Distant Investment of Corporate Venture Capital. Journal of Open Innovation: Technology, Market, and Complexity. 2019; 5(1):19.Chicago/Turabian Style
Kang, Shinhyung; Hwang, JungTae. 2019. "Moderating Factors in Distant Investment of Corporate Venture Capital." J. Open Innov. Technol. Mark. Complex. 5, no. 1: 19.
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.