Corporate Venture Capital

: parent firm value relationship : firm structure and environment as contingencies

Abstract

More and more firms are implementing a division of Corporate Venture Capital (CVC) as astrategy to differentiate their portfolio and create value. Through investments in entrepreneurialventures, companies acquire innovations and new technologies to maintain and increasecompetitive advantages. Nevertheless, the relationship between CVC and investing (parent)firm remains an important research topic to dive into. Starting from the contingency theory, Ipropose that a rise in company value via CVC investing is contingent on attentional mechanismsthat discipline the selection of fresh investment opportunities.Focusing on U.S. American parent companies of CVC divisions, this dissertation examines theimpact of industry and firm-specific determinants on CVC investment activity in variousindustries, as well as related effects on firm value. An increase in firm value connected withCVC investing, I believe, accrue to firms that adopt specified operational structures and operatein specific environments, with business similarity with the entrepreneurial ventures andoperating in the same metropolitan area. I show evidence that parent firm value increases amongcompanies investing in CVC that are operational concentrate and operate in low munificenceenvironments. I find support for my research model in a sample of 1.989 firm-year observationsand 159 U.S. American companies between 2000 and 2020.This analysis aims to show that managers of companies which are active in the CVC marketshould take into considerations the above-mentioned effects when approaching an investmentin venture capital, in order to maximize the firm’s gains in terms of innovations and strategy.

Date of Award	28 Apr 2022
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Fátima Shuwaikh (Supervisor)