The corporate venture capital as strategy for knowledge transfer

The purpose of our study is to investigate the impact of the corporate venture capital (CVC) investment on the level of knowledge transferred from corporate investor to their backed-companies. Our empirical results based on a large panel of U.S. start-ups over a 19-year period provide evidence that higher amounts of CVC investments are associated with a higher transfer of knowledge. The results of this research suggest that corporate investors need a proper mechanism of knowledge transfer if they are to maximize the innovative outcome of CVC investment. This mechanism is the strategic fit and the geographic proximity between the partners. This study argued that this mechanism increase the level of knowledge transfer from the corporate investors to the backed companies. Moreover, we present evidence that the knowledge transferred from the corporate investor to the company increases the financial valuation of the company. Finally, the absorptive capacity of companies has a positive moderator role that leads to higher levels of knowledge transfer from the corporate investor to the company after receiving the CVC investments.