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The impact of independent and heterogeneous corporate venture capital on firm efficiency

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  • Balz, Frank P.
  • Brinkmann, Florian
  • Kanbach, Dominik K.

Abstract

While corporate venture capital funds (CVCs) are commonly analyzed as homogenous units, they display significant heterogeneity across various organizational aspects, which affect them and subsequently their portfolio firms. Using a sample of 383 European portfolio firms from the longitudinal VICO dataset, we first investigate the impact of investor type (independent vs corporate) on firm operating efficiency. We show that firms backed by CVCs suffer reductions in productivity. We then account for CVC heterogeneity and find that these significant reductions in operating efficiency only occur for ventures backed by endoisomorphistic CVCs, which resemble more corporate structures. By contrast, firms backed by exoisomorphistic CVCs, which resemble more independent venture capital structures, do not show significant differences in productivity compared to ventures that receive independent venture capital backing.

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  • Balz, Frank P. & Brinkmann, Florian & Kanbach, Dominik K., 2023. "The impact of independent and heterogeneous corporate venture capital on firm efficiency," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    • Handle: RePEc:eee:jobuve:v:19:y:2023:i:c:s2352673423000136
    DOI: 10.1016/j.jbvi.2023.e00384
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    Cited by:

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    3. Lange, Francie & Tomini, Nino & Brinkmann, Florian & Kanbach, Dominik K. & Kraus, Sascha, 2023. "Demystifying massive and rapid business scaling – An explorative study on driving factors in digital start-ups," Technological Forecasting and Social Change, Elsevier, vol. 196(C).

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    More about this item

    Keywords

    Venture capital; Corporate venture capital; DEA; Efficiency; Isomorphism;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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