A multi-theoretic analysis of financial and strategic consequences of corporate venture capital

The purpose of this dissertation is to examine the relationships between the structural and managerial characteristics of corporate venture capital (CVC) programs and the consequences of their CVC activities, and reveal the mechanisms that lead to enhanced CVC performance. It consists of three studies which draw from three research streams: agency theory, option theory, and learning theory.The first study examined how the portfolio configuration as for technology and industry diversification influences the growth option value of the whole portfolio, and how the structural characteristics of a CVC program such as syndication and autonomy, influence its CVC managers’ investment decisions with regard to technology diversification. The results suggested that both technology diversification and industry diversification among portfolio companies were related to the growth value of their corporate investor in a U-shaped relationship. In addition, syndication activities of a CVC program were significantly related to technology diversification, while the autonomy of a CVC program was significantly related to industry diversification.The second study investigated how autonomy, incentive scheme, and monitoring mode of a CVC program would influence knowledge flows between the corporate investor and the portfolio companies, thereby impacting the corporate investor’s innovativeness and the portfolio company’s performance. The findings provided support for the negative impact of the VC-like incentive scheme and autonomy on knowledge transfer from portfolio companies to corporate investors.The third study investigated the impacts of four structural characteristics of a CVC program on its selection and valuation capabilities, including lifespan, stability, incentive schemes, and syndication with VC. The results showed strong impacts of syndication activity on the selection and valuation capabilities pertaining to financial returns, and mixed effects of lifespan and stability.