TY - JOUR
T1 - Access to the corporate investors' complementary resources
T2 - a leverage for innovation in Biotech Venture Capital-Backed companies
AU - Shuwaikh, Fatima
AU - Dubocage, Emmanuelle
N1 - Funding Information:
Fatima Shuwaikh is an Assistant Professor at Léonard de Vinci School of Management. She holds her PhD in Finance in 2018 from Paris Sacaly University. She joined as a research fellow in HEC Paris at the Private Equity Observatory. She did her Postdoctoral at Catolica Lisbon School of Business and Economics. She is a lecturer in Parsi Saclay and a research member in Paris Est Creteil. She is an expert in microfinance from the Frankfurt School of Finance and Management and a trainer for Microfinance Network for companies funded by USAID. Her research interests are Entrepreneurial Finance, Innovation and Ambidexterity.
Publisher Copyright:
© 2021 The Author(s)
PY - 2022/2
Y1 - 2022/2
N2 - Entrepreneurial companies are a vital source of innovation and are financed by investors with different profiles. We examine whether the innovative outputs of entrepreneurial companies are responsive to access to complementary resources from different types of venture capital (VC) funds: “independent venture capital (IVC) and corporate venture capital (CVC)”. We then delve deeper and examine the mechanisms by which we measure if access to investors’ complementary resources has an influence on the innovation performance of the companies they fund. Our sample consists of 1547 U.S. biotechnology companies founded between 1998 and 2013 and financed by IVC or CVC funds. We find that CVC-backed companies display higher rates of innovation output, as measured by their patenting outcomes, than their IVC-backed counterparts. We specify three mechanisms that affect the influence of complementary resources of corporate investors compared to those of IVC: (1) absorptive capacity enhances the ability of the company to grasp and utilize investor knowledge; (2) business similarity helps nurture the technologies of innovative companies, and (3) geographic proximity enables approachability.
AB - Entrepreneurial companies are a vital source of innovation and are financed by investors with different profiles. We examine whether the innovative outputs of entrepreneurial companies are responsive to access to complementary resources from different types of venture capital (VC) funds: “independent venture capital (IVC) and corporate venture capital (CVC)”. We then delve deeper and examine the mechanisms by which we measure if access to investors’ complementary resources has an influence on the innovation performance of the companies they fund. Our sample consists of 1547 U.S. biotechnology companies founded between 1998 and 2013 and financed by IVC or CVC funds. We find that CVC-backed companies display higher rates of innovation output, as measured by their patenting outcomes, than their IVC-backed counterparts. We specify three mechanisms that affect the influence of complementary resources of corporate investors compared to those of IVC: (1) absorptive capacity enhances the ability of the company to grasp and utilize investor knowledge; (2) business similarity helps nurture the technologies of innovative companies, and (3) geographic proximity enables approachability.
KW - Absorptive capacity
KW - Business similarity
KW - Citations
KW - Corporate venture capital
KW - Geographic proximity
KW - Innovation
UR - http://www.scopus.com/inward/record.url?scp=85119925370&partnerID=8YFLogxK
U2 - 10.1016/j.techfore.2021.121374
DO - 10.1016/j.techfore.2021.121374
M3 - Article
SN - 0040-1625
VL - 175
JO - Technological Forecasting and Social Change
JF - Technological Forecasting and Social Change
M1 - 121374
ER -