Abstract

Abstract Recent trends in corporate venture capital (CVC) activities have added to the size and complexity of the financial system. Intuition suggests that in a period marked by spectacularly increasing start-up valuations, the opportunity to earn large capital gains increases the importance of corporate investors’ financial motivations. Drawing on interviews with 12 Silicon Valley-based CVC units of global industrial companies, we examine if new trends in CVC investment represent a diversion from incumbents’ traditional focus on improving the competitive advantage of their core businesses. Building on the theory of the financialization of non-financial companies, we investigate the relationship between the strategic and financial motivations of CVC investing. We extend theory by distinguishing between developments at the extensive and intensive margins. We argue that the commonly applied quantitative measures capture financialization only at the extensive margin. Qualitative data indicate that the hypothesis of financialization does not hold at the intensive margin.

Full Text
Paper version not known

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 call

Disclaimer: 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.