【经管院每周系列讲座第293 期】Corporate venture capital and interfirm rivalry: A competitive dynamics perspective


Abstract: This study considers corporate venture capital (CVC) investments by established firms as a particular form of interfirm rivalry. Building on the competitive dynamics theory and the CVC literature, we argue that a focal firm’s CVC investment sends important competitive signals to rivals, thereby driving them into retaliatory CVC investments. We specifically examine how four factors characterizing a focal corporate investor’s CVC investments —industry relatedness, number of co-investors, amount of funding, and staging of the investment — may influence rivals’ awareness and motivation, thereby evoking their use of CVC as a competitive response. Our results suggest that the four factors have differential impacts on the likelihood of response. The results of this first step of examining competitive dynamics in the CVC context suggest that the competitive advantages generated by firms’ CVC investments are temporary, and corporate investors need to take rivals into account when formulating a CVC strategy.