This study takes an organizational decision-making perspective to examine when firms are likely to utilize CVC units as a mechanism for externalizing R&D. We draw insights from the behavioral theory of the firm to argue that managerial aspirations for innovation-related goals are an important driver of CVC initiatives within firms. We test our argument by examining both the adoption and termination of CVC units for a sample of information technology firms from 1992 to 2003. Results show that a firm is more likely to adopt and less likely to terminate a CVC unit when its innovation performance is closest to its social aspirations.
corporate venture capital, performance feedback, innovation performance, external R&D, termination
Corporate Finance | Entrepreneurial and Small Business Operations | Finance and Financial Management
Strategic Entrepreneurship Journal
Wiley: 24 months
GABA, Vibha and Shantanu BHATTACHARYA.
Aspirations, innovation, and corporate venture capital: A behavioral perspective. (2012). Strategic Entrepreneurship Journal. 6, (2), 178-199. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/5093
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