Details
| Original language | English |
|---|---|
| Pages (from-to) | 1-30 |
| Number of pages | 30 |
| Journal | Economics of Innovation and New Technology |
| Volume | 29 |
| Issue number | 1 |
| Early online date | 6 Feb 2019 |
| Publication status | Published - 2020 |
Abstract
This paper investigates a model where two corporate venture capital firms (CVCs) decide whether to finance a new venture stand-alone or together, called syndication. The CVCs obtain a cash flow if the venture succeeds. In addition, the venture has a positive or negative effect on an asset (e.g. a product or a process) of the CVCs parental companies. This effect may differ among the parental companies. I show that the CVC faced with the weaker positive effect becomes the stand-alone investor only if the cash flow is low. Otherwise, in equilibrium, there are only syndicates or stand-alone investments of the CVC with the stronger positive effect. However, if one CVC faces a positive effect on its parental company's asset whereby the opponent faces a negative effect, then a syndicate is still possible. The model generates empirical predictions for syndicates consisting of several CVCs.
Keywords
- Corporate venture capital, nature of innovation, nonmonetary support, syndication, venture capital
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Business, Management and Accounting(all)
- Management of Technology and Innovation
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In: Economics of Innovation and New Technology, Vol. 29, No. 1, 2020, p. 1-30.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Corporate venture capital and the nature of innovation
AU - Maxin, Hannes
N1 - Publisher Copyright: © 2019, © 2019 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2020
Y1 - 2020
N2 - This paper investigates a model where two corporate venture capital firms (CVCs) decide whether to finance a new venture stand-alone or together, called syndication. The CVCs obtain a cash flow if the venture succeeds. In addition, the venture has a positive or negative effect on an asset (e.g. a product or a process) of the CVCs parental companies. This effect may differ among the parental companies. I show that the CVC faced with the weaker positive effect becomes the stand-alone investor only if the cash flow is low. Otherwise, in equilibrium, there are only syndicates or stand-alone investments of the CVC with the stronger positive effect. However, if one CVC faces a positive effect on its parental company's asset whereby the opponent faces a negative effect, then a syndicate is still possible. The model generates empirical predictions for syndicates consisting of several CVCs.
AB - This paper investigates a model where two corporate venture capital firms (CVCs) decide whether to finance a new venture stand-alone or together, called syndication. The CVCs obtain a cash flow if the venture succeeds. In addition, the venture has a positive or negative effect on an asset (e.g. a product or a process) of the CVCs parental companies. This effect may differ among the parental companies. I show that the CVC faced with the weaker positive effect becomes the stand-alone investor only if the cash flow is low. Otherwise, in equilibrium, there are only syndicates or stand-alone investments of the CVC with the stronger positive effect. However, if one CVC faces a positive effect on its parental company's asset whereby the opponent faces a negative effect, then a syndicate is still possible. The model generates empirical predictions for syndicates consisting of several CVCs.
KW - Corporate venture capital
KW - nature of innovation
KW - nonmonetary support
KW - syndication
KW - venture capital
UR - http://www.scopus.com/inward/record.url?scp=85061303677&partnerID=8YFLogxK
U2 - 10.1080/10438599.2019.1571673
DO - 10.1080/10438599.2019.1571673
M3 - Article
AN - SCOPUS:85061303677
VL - 29
SP - 1
EP - 30
JO - Economics of Innovation and New Technology
JF - Economics of Innovation and New Technology
SN - 1043-8599
IS - 1
ER -