Abstract
While prior research has focused mainly on the consequences of firm CVC activities, little attention has been paid to how firms configure their CVC portfolios. We conceptualize firm CVC portfolio configuration in two dimensions – technological distance between a firm and its CVC portfolio and technological heterogeneity of the portfolio. We theorize that when a firm looks for new investment targets, a larger technological distance between the firm and its CVC portfolio directs the firm to choose an investee that will narrow its portfolio’s technological heterogeneity while a smaller technological distance encourages the firm to increase its portfolio’s technological heterogeneity. We further examine how CVC portfolio configuration may affect the firm’s learning from its CVC portfolio. We propose that a firm learns more from a more technologically heterogeneous portfolio, however this effect is reduced if the firm has a larger technological distance from its portfolio. Using a sample that consists of 106 U.S. firms with CVC arms and their CVC investments, we find support for these hypotheses.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
