Manag Rev Q (2018) 68:279–319

[Link]

Exploring the landscape of corporate venture capital:

a systematic review of the entrepreneurial and finance
literature

Patrick Röhm1

Received: 16 June 2017 / Accepted: 8 March 2018 / Published online: 15 March 2018
© Springer International Publishing AG, part of Springer Nature 2018

Abstract The influence of corporate venture capital (CVC) investments within the
venture capital industry, that is, equity stakes in high technology ventures, has stimu-
lated the academic literature on this specific research area. Generally, CVC is strongly
associated with the concept of corporate venturing and plays a vital role in the strate-
gic renewal of established companies. Owing to the multifaceted nature of the CVC
phenomenon, the existing literature is rather fragmented. Therefore, the purpose of
this article is twofold: first, bibliographic coupling is introduced to the field of CVC to
reveal the underlying structure of the current research front. Second, a content-related
review is conducted to shed light on nascent research streams and shortcomings within
the CVC literature that indicate promising avenues for future research. The systematic
review of a comprehensive set of 65 articles reveals that the prevailing CVC literature
is mainly driven by two dominant logics, management and finance, that tend to sepa-
rate themselves from one another. Moreover, nascent research streams are identified
that will broaden and enrich the academic discussion.

Keywords Corporate venture capital (CVC) · External venturing · Literature review ·

Bibliometric analysis · Bibliographic coupling

JEL Classification G24 · C45 · G29

B Patrick Röhm
pgroehm@[Link]

1 University of Hohenheim, Wollgrasweg 49, 70599 Stuttgart, Germany

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280 P. Röhm

1 Introduction

Corporate venture capital (CVC), that is, direct minority investments from established
firms in high technology small ventures, plays a central role in the venture capital
(VC) ecosystem (Dushnitsky 2006). The formation of a CVC triad through the inter-
action between a corporate mother firm, the CVC unit, and a venture, can deliver
some key benefits for all parties concerned. Acting as an intermediary, CVC units
provide ventures with access to complementary assets (Chesbrough 2002). Ventures,
which primarily operate in dynamic environments, can benefit from the technical sup-
port associated with CVC investments and can often overcome financial restraints
(Maula et al. 2005). CVC investments provide a vital instrument through which cor-
porate mothers can foster the innovation behavior of a venture (Dushnitsky and Lenox
2005b). Hence, a growing number of corporations are extending their existing inno-
vation portfolios through the adoption of CVC practices. In 2014 alone, the total
number of transactions with a CVC involvement in the US increased by 11% (792
deals), according to the MoneyTree Report provided by the National Venture Capital
Association and PricewaterhouseCoopers (NVCA 2015). Besides the most influential
and active CVC programs of Google, Intel, Salesforce, and Qualcomm (CB Insights
2015), 183 further investment vehicles of US-based companies supported ventures.
Such peaks in the investment behavior of corporations are recurrent. Several articles
(Boston Consulting Group 2012; Dushnitsky and Lenox 2006; Gompers and Lerner
2000) have described the cyclical nature of CVC investments since the 1960s. As
Gompers and Lerner (2000) reported, the instigation and abandoning of CVC programs
are strongly influenced by exogenous shocks such as the disruption of initial public
offerings (IPOs) in the early 1970s, or the stock market crash in 1987.
However, from an academic point of view, the interest in CVC continues unabated.
During the past two decades, the phenomenon of CVC has captivated scholars and
led to a rapid growth in the number of articles on the subject. To gain a fundamental
understanding of the ongoing academic discussion, some previously published litera-
ture reviews limit their search results to specific journals and time frames (Narayanan
et al. 2009) or particular aspects of the CVC phenomenon (Leten and van Dyck 2012).
In consequence, the objectives of the following article are twofold: first, the underlying
research front of the CVC literature is revealed using an explorative bibliographical
approach, thereby extending the status quo by introducing bibliographic methods into
the field of CVC. Second, the prevailing literature within this particular branch of
research is thoroughly examined and upcoming research streams and shortcomings
are discussed to identify issues that merit future research.
To meet these objectives, the remainder of the study is organized as follows: First,
an overview of both the underlying objectives of CVC vehicles and the corresponding
theoretical phenomenon of corporate venturing (CV) is provided. Second, building
on that overview, the data collection method is described. Third, the current research
front within the field of CVC is revealed, applying bibliographic techniques. Fourth,
major research streams and shortcomings are summarized and discussed. The paper
closes with a conclusion.

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Exploring the landscape of corporate venture capital… 281

Fig. 1 Corporate venture capital taxonomy. The taxonomy is adopted from Keil (2000) and Sharma and
Chrisman (1999)

2 Corporate venture capital as an external venturing mode

Since the early 1980s, an increasing number of articles has targeted the entrepreneurial
activities within organizations (Burgelmann 1983; Miller 1983; Sharma and Chrisman
1999). As a branch of corporate entrepreneurship (CE), corporate venturing can be
described as a set of processes and practices to explore and exploit new markets
and industries by creating new businesses (Narayanan et al. 2009). Literature on the
subject further distinguishes between internal and external modes of CV (Keil 2000;
Miles and Covin 2002; Sharma and Chrisman 1999). While Ellis and Taylor (1987)
define CV as the adoption of the “structure of an independent unit […] to involve
a process of assembling and configuring novel resources”. Keil (2000) introduced a
more fine-grained taxonomy to explain how CV activities can be used to transfer the
entrepreneurial spirit to established companies. Figure 1 illustrates this relationship
between CE, CV, and CVC.
However, while internal CV activities focus on creating new businesses within
existing organizational boundaries, external modes such as venturing alliances,
transformational arrangements, and CVC foster innovation across organizational
boundaries through semi-autonomous or autonomous entities (Keil 2000; Narayanan
et al. 2009; Sharma and Chrisman 1999). A further distinction is evident regarding
the underlying structure and organization of CVC programs. CVC units that provide
ventures with equity can be organized as self-managed funds within the corporation’s
structure or operate as a limited partner (LP) in pooled and dedicated funds, typically
managed by third party investors such as independent venture capitalists (IVCs) (Keil
2000; McNally 1995). Acting as an intermediary between the corporate mother and
the ventures, the fundamental perception of the CVC therefore determines the gov-

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ernance of these programs. Thereby the use of CVC is associated with the idea of
accruing both financial and strategic benefits from the supported ventures (Ernst et al.
2005); hence, the difference between those investment objectives is well documented
(Chesbrough 2002; Dushnitsky and Lenox 2006; Ernst et al. 2005; EY 2002; Röhm
et al. forthcoming; Weber and Weber 2005; Winters and Murfin 1988).

3 Method of review

This literature review aims to provide deep insights into the phenomenon of CVC and
to specify the current research front. Hence, the design of the study follows a systematic
scoping approach (Paré et al. 2015). In line with previously published literature reviews
(Crossan and Apaydin 2010; Hu et al. 2015; Nijmeijer et al. 2014), structured literature
reviews are mainly based on two dominant databases, Thomson Reuter’s Web of
Science (WoS, formerly ISI Web of Knowledge) and Scopus from Elsevier. Because
journal coverage varies (Mongeon and Paul-Hus 2016), 1 both databases were used to
identify CVC-related articles. To ensure a decent quality of the academic work, only
peer-reviewed journal articles written in English were considered. Hence, monographs,
Ph.D. theses, working papers, editorial notes, symposia, presentation slides, and book
reviews were excluded from the search. However, in contrast to other literature reviews
in the field of CVC, this study does not limit the search results to specific journals
and timeframes (Narayanan et al. 2009) or specific aspects of the CVC phenomenon
(Leten and van Dyck 2012).
The first step in the identification process involved searching Scopus and WoS for
the appearance of the term corporate venture capital in the title, abstract, or keywords
of all articles published up until September 2015. This search generated a total of 98
unique articles. Because the phenomenon of CVC has captivated scholars from various
research streams, resulting in a continuous development of the underlying definitions, a
supplementary survey was conducted to ensure the inclusion of relevant CVC articles.
Therefore, all 98 articles were downloaded and analyzed using WordStat by Provalis
Research, a text analysis software designed to reveal knowledge and trends from an
underlying text corpus, to extract synonymous search terms for corporate venture
capital. Consequently, all phrases with a minimum of two words and at least three
appearances were retained for further analysis, resulting in a wordlist comprising 1469
phrases. Each phrase was then reviewed by two researchers acting independently to
identify CVC synonyms. The interrater reliability was calculated using Cohen’s Kappa
(Cohen 1960) (κ = 0.7164) and Krippendorf’s Alpha (Krippendorff 1980) (α = 0.7156),
which indicated a substantial agreement between the two raters. Discordant opinions
were resolved through discussion. This broad set of additional search strings helped
to ensure all CVC synonyms and variations were encompassed. As a consequence,
the final wordlist comprises 13 search terms, each summarized in Table 1.

1 During the data collection process, the following differences were identified: While the Strategic Manage-
ment Journal is only available on Scopus for issues from 2011 onwards, Web of Science does not cover the
following journals: Venture Capital: An International Journal of Entrepreneurial Finance, World Review
of Entrepreneurship, Management and Sustainable Development and the Management Research Review.

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 Table 1 Overview of the applied search terms

Search term Search string in context References Additional articles

Corporate venture “The activity is often managed by a corporate venture capital program Alvarez-Garrido and Dushnitsky 98
capital that seeks a mix of financial returns as well as strategic gains” (2016)
Corporate fund “would not provide the right results on the headquarter[s’] incentives to Riyanto and Schwienbacher 0
setup a corporate fund” (2006)
Corporate VC “similar to private VC firms, corporate VC firms are both the agent of Wang and Wan (2013) 7
their corporate parents and the principal of funded ventures”
Corporate ventur* “external innovation is the most important strategic goal of corporate Ernst et al. (2005) 5
venturing activities”
CV activit* “making decisions about using external CV activities raises several Narayanan et al. (2009) 0
additional challenges for managers”
CV fund “which resulted in major losses to VC and CV fund valuations in Europe Hill et al. (2009) 0
and the U.S.”
Exploring the landscape of corporate venture capital…

CV program “some corporations consider their CV program a key link to the VC Narayanan et al. (2009) 1
community”
CV unit “the relational context of the CV unit is defined as the set of relationships Hill and Birkinshaw (2014) 0
with the key resource holder”
CVC “especially successful CVC managers will join independent VC zu Knyphausen-Aufsess (2005) 2
companies and therefore leave CVC activities with no future”
External CV* “external CV can take the form of joint ventures or spinoffs, but the most Reimsbach and Hauschild (2012) 0
important and prominent example is corporate venture capital (CVC)”
External ventur* “by engaging in external venture financing, corporate investors are better Benson and Ziedonis (2009) 0
able to learn”
Firms invest in “in particular, some firms invest in new ventures to provide a window on Dushnitsky and Lenox (2006) 0
new ventures new technologies”
IVC counterparts “suggest that corporate investors have a stronger preference than their IVC Park and Steensma (2013) 0
counterparts for new venture investees”
A wildcard (*) at the end of a search term signals Scopus and WoS to include all subsequent letters. Consequently, “CV activit*” will also include “CV activities” and “CV

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activity” in the search process

284 P. Röhm

Fig. 2 Development of CVC-related articles in higher and lower-ranked journals

In total, 15 further CVC-related articles were added to the 98 articles initially iden-
tified. To balance feasibility and comprehensiveness, as suggested by Paré et al. (2015)
and Tranfield et al. (2003), the total sample of 113 articles was narrowed down. Four
articles were dropped because they did not exclusively address CVC-related topics,
and six owing to the fact that they were themselves literature reviews of related research
areas, including open innovation (Herskovits et al. 2013), technology commercializa-
tion (Markman et al. 2008) or CE as such (Corbett et al. 2013). The largest group of
articles were excluded because they were neither theoretical in nature nor applying
either a multivariate analysis method or a case-study approach (38 articles). This step
includes mainly practically oriented articles (e.g., Dushnitsky 2011; Reaume 2003)
and academic articles providing bivariate statistics for overview purposes (e.g., Cum-
ming 2006; Fujiwara and Kimura 2011). Consequently, this process yielded a final
sample of 65 articles. Figure 2 depicts the number of CVC-related articles in both
higher and lower-ranked journals based on their impact factors.
Articles published in the Journal of Business Venturing (14%, n = 9), the Strate-
gic Management Journal (12%, n = 8), the Strategic Entrepreneurship Journal (11%,
n = 7), the Academy of Management Journal (6%, n = 4) and Entrepreneurship: Theory
and Practice (5%, n = 3) dominate the sample. The remaining 37 articles are distributed
across 26 other journals. Since the seminal publication of Gupta and Sapienza (1992)
the number of articles has burgeoned. It is notable, that from 2005 onwards highly-
ranked journals such as the Strategic Management Journal (first publication within
the sample in 2005) or Entrepreneurship Theory and Practice (first publication within
the sample in 2004) are outperforming their lower-ranked counterparts. In this vein,
the phenomenon of CVC is now clearly established in the context of rigorous aca-
demic discussion, thus cementing the importance of CVC vehicles in the VC industry
(NVCA 2015).

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Exploring the landscape of corporate venture capital… 285

4 Revealing the structure of the CVC landscape using bibliographic

coupling

In accordance with its explorative approach, this study applies a bibliographical

method to reveal the current status of the CVC-related literature. The idea behind all
bibliographic methods is that frequently cited articles tend to shape a given research
stream through the association of ideas (Garfield 1955). The aim of these particular
methods, bibliographic coupling, co-occurrence, co-citation, and co-authorship, is to
capture the underlying structures within a particular line of research, and accordingly
the methods are commonly used by scholars of management and organizations (Zupic
and Cater 2015). In contrast to the co-citation approach, where two articles are related
if they are cited together (Small 1973), bibliographic coupling is a measure of related-
ness based on the total number of references articles have in common (Kessler 1963).
Therefore, the connection between two articles is static over time (Jarneving 2005).
Consequently, this article builds a bibliographic coupling network by applying the
Visualization of Similarities (VOS) approach introduced by Van Eck and Waltman
(2010). The corresponding software tool, VOSviewer, has already been used in a vast
number of research articles (e.g., Rafols et al. 2012; Wikhamn and Wikhamn 2013).
This tool provides a reliable code to visualize all forms of bibliometric networks using a
distance-based approach. After conducting a normalization process, called association
strength normalization (Van Eck and Waltman 2009), VOSviewer optimizes the posi-
tion of the observed items in a two-dimensional space. By minimizing the weighted
sum of the squared Euclidean distances, an algorithm arranges all items in such a
way that strongly-connected items are located close to each other, and less-strongly-
connected ones are placed far away from each other. An optimization process ensures
that strongly-connected items are centered in the network, while nodes with a weaker
connection will appear at the edges of the network depiction (Van Eck and Waltman
2010; Waltman et al. 2010). Because several databases were used, a standardization
process was applied. Articles exclusively available on Scopus were transformed to a
Web of Science standard using the Scop2WOS tool, provided by Loet Leydesdorff
(for a similar approach see Leydesdorff et al. 2015). Furthermore, I used an additional
standardization macro to detect inconsistencies within the downloaded references to
improve the data quality. For instance, different forms of journal title were adjusted
(e.g., from VENTURE CAPITAL to Venture Capital) as were forms of authors’ names
(e.g., from M.V.J. Maula to MVJ Maula).
To provide deep insights into the rapidly growing CVC literature, bibliographic
coupling networks with different units of analysis were constructed based on the
bibliographic information of the sample (65 articles). The first step involved producing
a general bibliographic coupling network based on the journal information (Fig. 3).
Accordingly, each circle represents a journal. The size of the circle is influenced by
the total number of studies a journal published in the field of CVC. For instance, the
Journal of Business Venturing published nine articles between 1992 and 2011, whereas
the International Journal of Technology Management (bottom center) published only
the work of Bassen et al. (2006). Related journals, based on bibliographic coupling,
are placed close to each other, thus indicating that articles published in those journals
tend to cite the same references. Not surprisingly the visualization of the journal-based

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Fig. 3 Journal map based on bibliographic coupling linkages

network paints a clear picture. Prestigious journals like the Journal of Business Ven-
turing, the Strategic Entrepreneurship Journal, the Academy of Management Journal,
the Strategic Management Journal, and Entrepreneurship: Theory and Practice are
centered in the network and therefore tend to cite the same management-related arti-
cles. The distinction between management and finance-related journals also becomes
obvious upon applying the integrated clustering method of VOSviewer (Waltman et al.
2010). While financially-oriented journals, such as Financial Management, belong to
the green cluster (middle right), management-oriented journals are affiliated to the
red cluster, indicating that the field of CVC is quite dichotomous with two prevalent
points of view. This result is driven by the fact that both disciplines are strongly home
biased, in other words, the authors prefer to publish in their own research field. In
this vein, Cumming (2015) pointed out that especially editors and referees of financial
journals tend to have a low opinion on cross-citations to other disciplines, thus causing
a natural selection effect.
A more fine-grained analysis (see Fig. 4) illustrates the resulting relationships
between all 65 articles. Accordingly, the unit of analysis was shifted from journals to
single documents.
Following the same logic, each node represents an article. Additionally, the size of
each node relates to the number of times an article has been cited, while the colors
indicate when each article was published. The colors employed range from purple,
denoting publication dates from 2005 or before, to red (2015 onwards). The findings
of the calculated map thus contribute to the understanding of the current research
front in three ways: First, frequently cited articles are highlighted through the size of
the nodes. In this vein, articles written by Dushnitsky (e.g., Dushnitsky and Lenox
2005a, b; 2006) and Keil (e.g., Keil 2004; Keil et al. 2008) have shaped the CVC
discussion and therefore acquired must-cite status within and beyond the discussion

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Exploring the landscape of corporate venture capital… 287

Fig. 4 Document map based on bibliographic coupling linkages

of the CVC phenomenon. In addition, the work of Gupta and Sapienza (1992), Hill
and Birkinshaw (2008), Schildt et al. (2005), Wadhwa and Kotha (2006), and Zahra
and Hayton (2008) attracted a great deal of attention, according to the number of their
citations. Second, in contrast to the journal map (Fig. 3) the document map provides
information on the development of the CVC research front over time. As already shown
in Fig. 2, articles focused on CVC are growing steadily. Thereby, the network map
helps to separate older from more-recently published articles. For instance, the work
of Gupta and Sapienza (1992) and Pahnke et al. (2015) were published 23 years apart.
Accordingly, it is evident that the focus within the CVC field moved from learning
aspects (on the left-hand side, blue and purple) over more outcome-related articles (on
the right-hand side, green) toward the organizational settings of CVC units (on the
top-right, yellow and red). Third, as expected and predicted by Cumming (2015), the
separation of finance and management publications is also evident on the document
level. The publications of Benson and Ziedonis (2010), Chemmanur et al. (2014), Guo
et al. (2015), Ivanov and Xie (2010), Kim et al. (2011) and Masulis and Nahata (2009,
2011) are therefore placed in the bottom right corner, because they tend to cite the
same financially-oriented references.

5 Overview of the articles considered

After the underlying structure of the CVC research front had been revealed (see Sect. 4),
all articles within the sample were thoroughly examined. In this vein and in line with
other literature reviews (Crossan and Apaydin 2010; Keupp et al. 2012; Köhn forth-
coming; Lour et al. 2014), I subsequently collected information from each published
article on the authors, the main data sources, the sample’s geographical coverage, the
sample size and period, the industry focus, the underlying methodology (conceptual

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vs. empirical), the main analytical method, and the paper’s main focus. The results are
summarized in Table 2.
The findings of the bibliographic analysis enhance the understanding of the struc-
tural status quo of the CVC literature, highlighting that the field of CVC is driven by
two dominant logics. In particular, it was revealed that both literature streams fail to
take their interrelationship into consideration. Accordingly, the following review aims
to present and restructure the main findings of those two logics by transferring the arti-
cles’ results into a holistic framework. To do so, the relevant focus of all 65 papers in
the analysis, presented in Table 2, were used as a starting point to iteratively group the
articles’ main results. Building on the work of Bruton et al. (2010), this process resulted
in the identification of five different research streams. The resulting framework, which
is depicted in Table 3, provides a logical structure for the review’s findings. To clearly
distinguish between the level of analysis, that is, the corporate mother firm, the CVC
unit, and the venture (the CVC triad), the framework also includes information on the
research object (for a similar approach see Narayanan et al. 2009).

5.1 Drivers of CVC adoption

When implementing CVC practices, established corporations tend to struggle with

internal resistance such as the excessive diversion of management time and the gen-
eral corporate mindset (Bannock Consulting 2001). To overcome these obstacles, an
emerging research stream introduced several drivers on both the firm and industry
levels that influence the adoption and intensity of corporate investment activities.

5.1.1 Firm level drivers

Astonishingly, a relatively small number of articles uses historical accounting data or

other firm-specific measurements to examine the conditions under which established
corporations are most likely to support ventures through CVC investments. Among
those, Basu et al. (2011) noted that a high level of marketing expenditure and a corpora-
tion’s technological resources could stimulate the use of CVC. In addition, Dushnitsky
and Lenox (2005a) highlighted the role of a corporation’s cash flow and innovation
stock as antecedents of CVC investments.

5.1.2 Industry level drivers

Some articles direct attention to mimetic behavior within a corporation’s peer group.
Noyes et al. (2014) presented a network derived from interlocking boards as a possible
antecedent of a firm’s commitment to CVC investments. Within those networks, two
corporate mothers are considered to be related when they share at least one board
member. The authors argue that interlocking boards play a vital role in the diffusion
and adoption of management practices. Therefore, if a corporation has direct ties to a
firm that is already engaged in CVC activities, it can optimize the information inflow
and hence increase the engagement in CVC investments.

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 Table 2 Examined articles on CVC

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

Alvarez- Thomson One USA 545 ventures 1990–2003 Biotechnology Quantitative Probit Innovation
Garrido and thereof 34% regression, performance of
Dushnitsky with Negative CVC-backed
(2016) CVC-backing binomial ventures
regression
Anokhin et al. Thomson One, n/ac 163 corporations 1998–2001 No restrictions Quantitative Negative Syndication
(2011) Corporate Venturing with CVC binomial network
Directory & investments regression centrality
Yearbook
Bassen et al. – Germany 1 CVC unit n/ac Manufacturing Qualitative Case study Performance
(2006) measuring of
CVCs
Exploring the landscape of corporate venture capital…

Basu and Thomson One USA 477 corporations 1990–2000 No restrictions Quantitative Negative Strategic
Wadhwa binomial renewal of
(2013) regression corporations
Basu et al. Thomson One USA 477 corporations 1990–2000 No restrictions Quantitative Negative Driver of CVC
(2011) thereof 83 with binomial investments
CVC regression
investments
Bengtsson and TheFunded, Thomson USA 526 investors 2007–2009 No restrictions Quantitative ANOVA, Logit Entrepreneurs’
Wang (2010) One thereof 2.9% regression stated
CVCs preferences on
VC abilities
Benson and Thomson One, USA 34 corporations 1987–2003 Information Quantitative OLS regression Venture
Ziedonis VentureSource with CVC technology acquisition
(2009) investments performance

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289
 Table 2 continued
290

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

123
Benson and Thomson One, USA 61 corporations 1987–2003 Information Quantitative OLS regression Venture
Ziedonis VentureSource with CVC technology acquisition
(2010) investments performance
Bertoni et al. RITA 2004 Italy 379 ventures 1994–2003 High-tech and Quantitative GMM regression Cash flow
(2010) thereof 33 with service sensibility of
CVC-backing VC-backed
ventures
Bertoni et al. RITA 2004, Thomson Italy 531 ventures 1994–2003 High-tech and Quantitative GMM regression Growth of
(2013) One, AIFI thereof 24 with service VC-backed
CVC-backing ventures
Bjørgum and Survey Denmark, 6 ventures 2012 Pre-commercial and Qualitative Case study Value-added
Sørheim Finland, thereof 3 with marine energy contributions
(2015) Norway, CVC-backing of CVCs
Sweden
Chemmanur Thomson One USA 2129 ventures, 1980–2004 All other than Quantitative OLS regression, Innovation
et al. (2014) thereof 462 finance, insurance Tobit performance of
with and real estate regression, CVC-backed
CVC-backing Probit ventures
regression
Dimov and Thomson One USA 3557 investors 1962–2004 No restrictions Quantitative OLS regression, Investment
Gedajlovic including 763 Logit decisions
(2010) CVC units regression among VC
types
Dokko and Thomson One, USA 70 CVC units 1992–2008 Information Quantitative GMM regression Career
Gaba (2012) Corporate Venturing technology experience of
Directory & CVC managers
Yearbook
P. Röhm
 Table 2 continued

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

Dushnitsky Thomson One USA 372 corporations 1990–1999 Software Quantitative Negative Interplay of
and Lavie 29 thereof with binomial CVC
(2010) CVC regression investments
investments and alliance
formation
Dushnitsky Thomson One USA 2289 1969–1999 No restrictions Quantitative Negative Variation of
and Lenox corporations binomial corporate
(2005a) 247 thereof regression innovation
with CVC rates through
investments the use of CVC
Dushnitsky Thomson One USA 1171 1990–1999 No restrictions Quantitative OLS regression CVC adaption
and Lenox corporations drivers
(2005b) 115 thereof
Exploring the landscape of corporate venture capital…

with CVC
investments
Dushnitsky Thomson One USA 1173 1990–1999 No restrictions Quantitative OLS regression Creation of value
and Lenox corporations through CVC
(2006) 171 thereof investments
with CVC
investments
Dushnitsky Thomson One USA 2830 investors 1990–1999 High technology Quantitative Negative Investment
and Shapira including 300 binomial practices and
(2010) CVC units regression, performance
OLS of VC types
regression,
Logit
regression

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291
 Table 2 continued
292

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

123
Dushnitsky Thomson One USA 167 CVC 1990–1999 No restrictions Quantitative Logit regression IPP regime and
and Shaver investments by industry
(2009) 87 CVC units overlaps in the
formation of
CVC-venture
relationships
Gaba and Thomson One, USA 71 CVC units 1992–2003 Information Quantitative OLS regression Adoption and
Bhat- Corporate Venturing technology termination of
tacharya Directory & CVC units
(2012) Yearbook based on
innovation
performance
Gaba and Thomson One, USA 70 CVC units 1992–2008 Information Quantitative Probit regression CVC implemen-
Dokko Corporate Venturing technology tation choices
(2016) Directory & on CVC
Yearbook abandonment
Gaba and Thomson One, USA 264 corporations 1992–2001 Information Quantitative Probit regression CVC adaption
Meyer Corporate Venturing including 94 technology drivers
(2008) Directory & CVC
Yearbook adoptions
Guo et al. Thomson One USA 437 CVC units 1980–2004 All other than Quantitative OLS regression, Investment,
(2015) finance Probit duration and
regression, exit strategies
Logit
regression
P. Röhm
 Table 2 continued

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

Gupta and Pratt’s Guide to USAc 169 VCs 1987 No restrictions Quantitative OLS regression VCs investment
Sapienza Venture Capital preferences
(1992) Sources
Hill and Survey 8 countries from 95 external CVs 2001–2003 No restrictionsf Quantitative ANOVA, OLS CV typology and
Birkinshaw North regression, the influence
(2008) America, Asia, Logistic on
and Europee regression performance
and survive
Hill and Survey 8 countries from 95 external CVs 2001–2003 No restrictionsf Quantitative ANOVA, Path Influence of
Birkinshaw North analysis ambidexterity
(2014) America, Asia, on CV survival
and Europee
Exploring the landscape of corporate venture capital…

Hill et al. Survey 8 countries from 95 external CVs 2001–2003 No restrictionsf Quantitative ANOVA, CVC implemen-
(2009) North Seemingly tation choices
America, Asia, unrelated on
and Europee regression performance
Ivanov and Thomson One n/ac 1510 IPOs 219 1981–2000 No restrictions Quantitative Probit CVC
Xie (2010) thereof with regression, value-added
CVC-backing OLS contributions
regression,
Three-factor
model
regression
Keil (2004) Interviews Europe 2 corporations 1996–2000 Information and Qualitative Case study Building new
with external communication capabilities
CVs through CV

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293
 Table 2 continued
294

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

123
Keil et al. Interviews n/ac 5 corporations 1998–2002 Information and Qualitative Case study Relationship of
(2008) with CVC communication learning and
units developing
capabilities in
the CVC
context
Keil et al. Thomson One USA 358 corporations 1996–2005 No restrictions Quantitative GMM CVC resources
(2010) with CVC regression, and
investments Tobit syndication
regression network
positions
Keil et al. Thomson One USA 110 corporations 1993–2000 Information and Quantitative Negative Innovation
(2008) communication binomial performance
regression, and the choice
Poisson of external
regression venturing
modes
Kim et al. Korean Financial South Korea 934 ventures 291 1999–2001 No restrictions Quantitative OLS regression CVC
(2011) Supervisory Service thereof with contribution
CVC-backing effects
Lee et al. Thomson One USA 29 corporations 1995–2005 Information and Quantitative Negative Knowledge
(2015) with CVC communication binomial transfer
investments regression through CVC
investments
P. Röhm
 Table 2 continued

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

LiPuma CorpTech USA 1348 ventures 2003 High technology Quantitative Logit regression Influence of VC
(2006) 158 thereof types on
with ventures’ inter-
CVC-backing nationalization
Masulis and Thomson One USA 273 CVC units 1996–2001 No restrictions Quantitative OLS regression, Financial
Nahata invested in 177 Tobit contracting in
(2009) IPO ventures regression CVC-backed
IPOs
Masulis and Thomson One USA 245 ventures 60 1991–2006 No restrictions Quantitative Probit Influence of VC
Nahata thereof with regression, backing on
(2011) CVC-backing Logit venture
regression, profitability
Logistic
Exploring the landscape of corporate venture capital…

regression
Maula et al. Survey USA 91 ventures with 2000–2001 Biotechnology, Quantitative Structural Creation of
(2003) CVC-backing Medical, Internet, equation social capital
Communication, modelling through CVC
Software,
Hardware
Maula et al. Survey USA 91 ventures with 2000–2001 Biotechnology, Quantitative ANOVA, t test Value-added
(2005) CVC-backing Medical, Internet, contribution
Communication, along IVCs
Software, and CVCs
Hardware

123
295
 Table 2 continued
296

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

123
Maula et al. Survey USA 91 ventures with 2000–2001 Biotechnology, Quantitative Structural Relationship-
(2009) CVC-backing Medical, Internet, equation based risk and
Communication, modelling learning
Software, benefits
Hardware
Noyes et al. Thomson One USA 150 corporations 1996–2003 No restrictions Quantitative OLS regression Interlocking
(2014) with CVC boards and
investments CVC
investments
Pahnke et al. Thomson One, USA 198 ventures 1986–2007 Medical device Quantitative GEE negative Institutional
(2015) VentureSource 36% thereof binomial logics and
with difference-in- venture
CVC-backing difference innovation
analysis performance
Park and Thomson One, USA 508 ventures 271 1990–2003 Wireless Quantitative Probit regression Value-added
Steensma LinkSV thereof communications, contributions
(2012) CVC-backed computer of CVCs on
hardware, venture
semiconductors performance
Park and Thomson One USA 508 ventures 271 1990–2003 Wireless Quantitative Probit Selection and
Steensma thereof communications, regression, nurturing
(2013) CVC-backed computer Negative effects of
hardware, binomial corporate
semiconductors regression investors
P. Röhm
 Table 2 continued

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

Sahaym et al. Thomson One USA 400 industries 1997–1999 Manufacturing Quantitative Tobit regression Industry level
(2010) effects on the
use of CVC
Schildt et al. Thomson One USA 110 corporations 1989–2001 Information and Quantitative Logistic Choice of
(2005) communication regression external
venturing
modes
Smith and Thomson One USA 128 1978–2007 Medical device Quantitative Negative User knowledge
Shah (2013) CVC-venture binomial as antecedents
dyads regression of CVC
investments
Souitaris and Interviews n/ac g 13 CVC units 2002, 2011–12 12 industries Qualitative Case study CVC investment
Exploring the landscape of corporate venture capital…

Zerbinati practices
(2014)
Souitaris et al. Interviews USA and Europe 6 CVC units 2002 6 industries Qualitative Case study Institutional
(2012) isomorphism
within CVCs
Teppo and Interview North America 11 CVC units 2003–2005 Energy Qualitative Case study Determinants of
Wüsten- and Europeh and 16 VCs fund survival
hagen
(2009)
Tong and Li SDC Platinum USA 546 investments 2003–2005 All other than Quantitative Probit regression Choices between
(2011) by 99 CVCs finance CVC and
acquisitions

123
297
 Table 2 continued
298

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

123
Van de Vrande Thomson One USA 78 corporations 1990–2000 Pharmaceutical Quantitative Log–log Alliance
and Van- with CVC regression formation
haverbeke investments through prior
(2013) CVC
investments
Van de Vrande Thomson One USA 153 corporations 1990–2000 Pharmaceutical Quantitative Negative Creation of
et al. (2011) binomial innovation
regression through
external
venture modes
Wadhwa and Thomson One USA 248 investments 1996–2000 Telecommunication, Quantitative Tobit regression Resource
Basu (2013) by 43 CVC Semiconductor, commitment
units and Computer and
exploration in
CVC
investments
Wadhwa and Thomson One USA 36 corporations 1989–1999 Telecommunication Quantitative Negative Knowledge
Kotha with CVC binomial creation
(2006) investments regression through
external
venturing
Wang and SDC Platinum, USA 200 ventures 2000–2007 No restrictions Quantitative OLS regression IPO
Wan (2013) Thomson One with VC underpricing
backing of VC-backed
ventures
Weber and Interviews Germany 7 CVC-venture n/ac n/ac Quantitative Regression Social capital
Weber dyads analysisi and knowledge
(2010) relatedness in
CVC dyads
P. Röhm
 Table 2 continued

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

Weber and Interview Germany 6 CVC triads 2002 Media and high Qualitative Case study Antecedents of
Weber technology social
(2011) liabilities in
CVC triads
Yang (2012) Survey, Thomson USA 232 CVC unit 1996–2000 No restrictions Quantitative OLS regression Organizational
One, Corporate investments learning based
Venturing Directory on governance
& Yearbook characteristics
Yang et al. Thomson One USA 189 corporations 1990–2004 All other than Quantitative OLS regression Portfolio
(2014) with CVC finance diversification
investments on firm value
Yang et al. Thomson One USA 166 corporations 1990–2001 No restrictions Quantitative Logit regression, Performance and
Exploring the landscape of corporate venture capital…

(2009) with 2110 Negative valuation

CVC binomial identification
investments regression ability
Zahra and Survey, Lexis Nexis Worldwide 217 corporations 2000–2003 Manufacturing Quantitative OLS regression Use of
Hayton international
(2008) CVC
investments on
a corporate’s
performance

123
299
 Table 2 continued
300

References Main CVC data Geographical Sample size Sample period Industryb Methodology Analytical Relevant focus
sourcea focus method

123
zu Interviews USA and 8 CVC units 1998–2002 Consulting, Qualitative Case study Value-added
Knyphausen- Germany Manufacturing, contributions
Aufsess Financial, of CVC
(2005) Publishing, High investors
technology
a All data sources were standardized to the latest available denotation
b Owing to considerable variations in the use of SIC codes the industry sectors used were not standardized
c Not applicable due to missing specifications
d The authors limit their geographical scope to VCs headquartered in California, Massachusetts, and Texas
e Hill and Birkinshaw (2008) provide no further information on the country level
f The majority of the survey responses were observed in the following industries: high technology, oil and gas, automotive, manufacturing, consumer goods, transportation,
and professional services
g Souitaris and Zerbinati (2014) only report the geographical investment preferences of the observed CVC units
h In detail: Denmark, Finland, France, Germany, Norway, Sweden, and Switzerland
i Weber and Weber (2010) provide no further information regarding the regression-based analysis used
P. Röhm
Exploring the landscape of corporate venture capital… 301

Table 3 Overview of the extracted research streams

Research stream Research object Research focus

Drivers of CVC adoption Corporate mother Firm level drivers

Industry level drivers
CVC governance aspects CVC unit CVC staff and compensation
Organizational structure
CVC investment procedure CVC unit Pre-investment phase
Post-investment phase
Value-added contributions Portfolio companies Implication for a venture’s
innovation performance
Implication for a venture’s
financial performance
Various implications
Implications for corporate Corporate mother Strategic Learning
mothers Financial effects
CV mode interaction

Moreover, Gaba and Bhattacharya (2012) rely on an organizational decision-

making perspective to answer the question of under which conditions firms are willing
to accept the organizational risks associated with the use of CVC investments. When
evaluating their performance, organizations use a predefined aspiration level as a ref-
erence point to compare their outcomes either with their past performance or that of
their peers. In fact, differences between aspirations and the actual observed perfor-
mance outcomes can motivate organizations to review their risk-taking behavior and
subsequently adopt CVC practices. A major finding of this study is that corporations
tend to establish a CVC unit when their innovation performance is close to their social
aspirations.
Gaba and Meyer (2008) focused on management innovations (i.e., the adoption of
CVC practices) that can spread through social networks and thus cross organizational
boundaries within a corporation’s peer group. The authors argue that the general pop-
ularity of CVC within a corporation’s peer group, the status of early CVC adaptors,
the geographical proximity of corporations to existing CVC units, and the outcome
experience of those prior adopters can be interpreted as a contagious impulse that influ-
ences the likelihood of establishing a CVC program. The same also holds for impulses
originating from the IVC industry. For instance, by taking the weighted average of the
geographical distance of the three predominant VC clusters (Silicon Valley, New York,
and Route 128) the probability of a CVC adoption increases, if the firms’ headquarters
are located close to one of the IVC clusters.
Moreover, several other drivers on the industry level such as, the competitiveness
of an industry (Basu et al. 2011), the intellectual property regime (Basu et al. 2011;
Dushnitsky and Lenox 2005a), the technology-related circumstances (Basu et al. 2011;
Dushnitsky and Lenox 2005a; Sahaym et al. 2010), the total factor productivity, the
environmental munificence, and the R&D intensity within a firm’s industry (Sahaym
et al. 2010) could also influence the attractiveness of CVC.

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302 P. Röhm

5.2 CVC governance aspects

Dushnitsky (2006) notes that the governance of CVC activities is a multifaceted topic.
Owing to limited data availability, only a few articles address governance-related
topics, including the work of Dushnitsky and Shapira (2010), Gaba and Dokko (2016),
Hill et al. (2009), Hill and Birkinshaw (2014), Souitaris et al. (2012), and Teppo and
Wüstenhagen (2009).

5.2.1 CVC staff and compensation

Among the published articles, only a small number discuss the importance of
personnel-related aspects (e.g., staffing of the CVC unit and the compensation of
investment managers) in the CVC setup. For instance, staffing decisions in general
and a CVC managers’ career experiences in particular are important aspects of the
longevity and efficiency of such CVC initiatives. Gaba and Dokko (2016) found that
putting a staff manager with considerable firm-specific experience with the corporate
mother in charge can be detrimental to a CVC unit because internal hires struggle to
acquire the depth of knowledge necessary to understand the value of CVC practices
for the firm. Furthermore, internal hires tend to view CVC investments as a primary
tool to deliver strategic benefits for the corporate mother, and therefore might neglect
financial objectives. On the other hand, staffing a CVC unit with managers with an
IVC background could increase the CVC vehicle’s longevity.
Furthermore, Dokko and Gaba (2012) investigated the effect of individuals’ career
experiences on the extent of variation in practice. The research was spurred by the
recognition that individuals who implement and manage adopted practices from the
IVC industry also play a vital role in the interpretation and translation of those practices
in the corporate context. The results indicated that CVC units staffed by managers
with IVC experience tended to adopt the prevailing practices from that particular
environment to leverage financially-oriented goals through investments in early-stage
ventures. In addition, CVC units staffed with managers with prior firm-specific and
engineering experience tend to prioritize strategic benefits over financial ones and tend
to invest in later-stage ventures.
Beyond the staffing aspects, the compensation of CVC managers is an emerging
topic within the governance-related research stream. While Dushnitsky and Shapira
(2010) found evidence that the compensation schemes used by CVC vehicles could
influence the overall performance of a CVC unit, some authors showed that the use of
an IVC incentive scheme could also have negative consequences: For instance, Hill
et al. (2009) highlight that the use of high-powered equity-based compensation to
reward and incentivize managers has a positive effect on the financial performance of
the CV unit, but astonishingly does not stimulate strategic performance. In addition,
Yang (2012) observed in a survey based on 18 participants (generally CVC managers
or executives responsible for new business development) that an IVC-like incentive
scheme could reduce the strategic innovativeness of the corporate investor.

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Exploring the landscape of corporate venture capital… 303

5.2.2 Organizational structure

Besides staffing and compensation related governance topics, some articles discuss the
organizational structure of CVC programs. While some authors highlight the autonomy
(Hill et al. 2009; Teppo and Wüstenhagen 2009) and cultural aspects (Teppo and
Wüstenhagen 2009), a widely neglected topic investigates the fundamental view on
CVC within existing organizational boundaries.
Among those, Hill and Birkinshaw (2008) initially analyzed different organizational
configurations of CVC units. Beyond that, Hill and Birkinshaw (2014) drew on the
well-established interplay of exploration (building new capabilities) and exploitation
(using existing capabilities) to link the general orientation of CV units to their survival
rates. The results indicate that CV units relying on an ambidextrous approach in the
form of the simultaneous use of CV as an instrument to explore and exploit capabilities,
have a higher survival rate than those with a clear focus. Those units are typically
characterized by a high level of interaction with all parties involved, such as senior
executives, business units, and members of the VC community.
In addition, Souitaris et al. (2012) observe how new organizational units, such as
CVCs, reconcile the competing forces from two different institutional environments.
CVC units might focus their organizational structures on either their corporate parents
(endoisomorphism) or on the IVC industry (exoisomorphism). The direction the unit
favors is influenced by staffing decisions and the legitimacy the CVC units seek.
CVC units aligning with their parent’s norms (endoisomorphism) are more likely
to develop mechanistic structures with command-like communication, concentrated
decision making, fixed and written procedures, and a clear division of labor into
specific tasks. In contrast, CVC units aligning with the norms of the IVC industry
(exoisomorphism) are usually characterized by a consultative style of communication,
flexible and unwritten procedures, evenly distributed decision making, and overlapping
responsibilities. Owing to the relatively small sample of six cases, Souitaris et al.
(2012) could not relate the concept of isomorphism to performance.
Finally, the organizational structure also defines the way in which CVC perfor-
mance is measured. This issue raised by Teppo and Wüstenhagen (2009) includes
how corporations measure CVC success and deal with failures. This article is one of
those addressing the fact that CVC units need to act accept risk and be innovative in an
environment characterized by error avoidance. Thus, the work of Bassen et al. (2006)
suggested a solution might be to adopt a “Balanced Scorecard” approach to connect
both worlds.

5.3 CVC investment procedure

The following section discusses the issue of how CVC investors structure and moni-
tor their investments. The prevailing literature outlines a well-documented investment
process (Tyebjee and Bruno 1984; Wright and Robbie 1998) that is essentially oriented
toward IVCs, and therefore does not entirely suit the managerial investment practices
of CVC units. Souitaris and Zerbinati (2014) drew on their previously formulated con-
cept of isomorphic tendencies to develop a conceptual model of corporate investment

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304 P. Röhm

practices. The authors describe the CVC deal-making process through outlining eight
subsequent stages which can be summarized as relating to either the pre-investment
or post-investment stage.

5.3.1 Pre-investment phase

As a first step, CVC units can source potential deals internally or rely on contacts within
the VC industry. By communicating regularly with their VC peers, CVC investors
spot new investment opportunities and acquire insights into the required capabilities
of established IVCs (Hill et al. 2009). Accordingly, attention should be paid to several
search patterns CVCs tend to use. For instance, the industrial overlap and the IP regime
of a potential portfolio company play a crucial role in the investment decision process
of CVCs. This topic was raised in several articles such as those by Dushnitsky and
Lenox (2005a) and Dushnitsky and Shaver (2009). Above, Wadhwa and Basu (2013)
showed that the technological and market-related overlap of investor and investee is
also a good predictor of the financial commitment of a CVC unit.
Driven by the power of available databases a wide range of articles observe the
decision to syndicate investments with IVCs and other complementary funds such as
CVCs or governmental VCs. By syndicating these investments (Jääskeläinen 2012),
a CVC can reduce its risk exposure, gain a central position within the VC network,
and simultaneously improve its ability to identify ventures with a strong strategic fit
(Yang et al. 2009). Some articles indicate that the participation of a CVC vehicle
increases the total number of co-investors (Dushnitsky and Shapira 2010), which can
influence the overall financial performance positively (Hill et al. 2009). For instance,
Keil et al. (2010) investigated 358 corporate investment vehicles and observed how
CVC units rapidly attained central positions within a syndication network. Owing to
the fact that IVCs in particular tend to seek prestigious co-investors with the same
central network position, new entrants face considerable barriers to entry into the VC
market. By providing a fundamentally different resource base to IVCs, new corpo-
rate entrants can bridge peripheral network positions by syndicating their investments
with IVCs despite being newcomers. Illustrating another point of view, Anokhin et al.
(2011) noted that, in addition to a central network position, the investment strategy
pursued is a key factor for CVC units in highly concentrated industries. The authors
argue that CVC units limit their potential benefits by placing themselves in the middle
of the syndication network while supporting as many ventures as possible. In con-
trast, the most appropriate strategy for CVC investors in these industries is to keep
away from the center of the syndication network by investing in portfolio companies
without the participation of well-positioned co-investors. The so-called maximizing
isolationist strategy is the exact opposite of the second-best investment strategy, which
combines reduced investment activity with a central position in the syndicate network
(minimizing centralist).

5.3.2 Post-investment phase

Nevertheless, once an investment is made, investors can employ various instruments to

influence the behavior of their portfolio companies and to overcome agency problems.

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Exploring the landscape of corporate venture capital… 305

First, CVC vehicles can organize their investment in such a way that financing is
only released when predefined milestones are met (known as investment staging).
Second, lead investors usually receive a seat on the board to be able to monitor the
management’s behavior. Besides Gompers and Lerner (2000), Yang (2012) argued that
representation on a venture’s board of directors is a crucial instrument in exercising
control rights and at the same time helps to stimulate knowledge outflow through
the absorption of information in terms of industry trends and technological insights.
Surprisingly, the study of Yang (2012) could not find a significant link between board
representation and knowledge outflow. However, CVC units with a complementary
relationship to their supported ventures are granted more representation on boards than
their counterparts whose parents are potential competitors of their portfolio companies.
In addition, if CVCs are lead investors they receive significantly lower board seats than
lead IVCs (Masulis and Nahatan 2009). Ivanov and Xie (2010) argue that strategically
oriented CVCs tend to have a higher level of board representatives than their financially
oriented counterparts. However, the topic of social interaction between investor and
investee is discussed in several articles (e.g., Maula et al. 2003, 2009; Weber and
Weber 2010, 2011).

5.4 Value-added contributions

As already mentioned, the behavior of ventures backed by VCs is strongly influenced

by the institutional logic their investors rely on. Their different resource bases and
complementary assets mean that CVC units can make various value-added contri-
butions to their portfolio companies. The value-added activities flowing from CVC
investors are well documented and have been analyzed in a wide range of studies that
also take account of the value adding potential of different types of CVC investors
(zu Knyphausen-Aufsess 2005) and other investment vehicles such as business angels
and IVCs (Bjørgum and Sørheim 2015).

5.4.1 Implication for a venture’s innovation performance

Recent CVC literature focuses far more on the interaction between a VC funding event
and a venture’s patenting activity than was the case previously. In general, the sup-
port of a VC investor can stimulate innovation output through diminishing financial
constraints. Consequently, the availability of further financial resources increases the
R&D investments of these ventures and helps them to outperform their counterparts
lacking VC backing (Bertoni et al. 2010). Comparing ventures based in the US, the
work of both Alvarez-Garrido and Dushnitsky (2016) and Park and Steensma (2013)
demonstrates that the innovation output of these ventures is sensitive to the relevant
investor type. In both studies, the innovation output of CVC-backed ventures out-
performed that of their IVC-backed counterparts, whether measured through patents
granted or patent applications. Chemmanur et al. (2014) also used the patent outcome
measure in their research and found support for the innovation performance implica-
tions. In contrast to these findings, Pahnke et al. (2015) argue that this potential benefit
could be narrowed through the corporate logic on which the CVC units rely. In this

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306 P. Röhm

case, the participation of CVC investors within a funding round has no effect on the
level of technological or commercial innovation.

5.4.2 Implication for a venture’s financial performance

In addition to the literature adopting a purely patent-driven view, a small research

branch also takes alternative measures into account when evaluating the value-added
contributions of CVC investors. While Kim et al. (2011) observed no difference
between the investment of dependent and independent VCs, and the performance of
ventures (i.e., sales, employees, R&D intensity, and return on equity (ROE), Park and
Steensma (2012) demonstrated there were conditions under which ventures with CVC
funding could outperform IVC-backed ones. By evaluating the IPO and failure rates
of ventures, the study shows that new ventures, particularly those seeking specialized
complementary assets or those operating in uncertain environments, profit from the
participation of a CVC unit in terms of higher IPO fractions and lower failure rates.
Furthermore, Ivanov and Xie (2010) found that CVC vehicles add value to
entrepreneurial companies only if those ventures have a strategic fit to the corpo-
rate mother. In this case, strategic CVC-backed ventures had a higher IPO valuation
than their purely IVC-financed peers. However, if the ventures are strongly associ-
ated with the strategy of the corporate mother, CVC-backed targets also attract higher
takeover premiums in the case of an acquisition. Furthermore, the study of Wang and
Wan (2013), which is based on signaling theory, demonstrates that the investment of
a CVC unit can be interpreted as a positive signal for the quality of a venture, in the
sense that CVC-backing helps to attract a sufficient number of subscriptions with-
out diminishing the offer price. Hence, a high level of involvement of the CVC unit
can reduce the risk of an IPO being underpriced. Additionally, Masulis and Nahata
(2011) show that CVC-backing leads to higher announcement returns compared with
ventures backed by IVCs.
Alongside exit events, Bertoni et al. (2013) examined the employment and sales
growth of 531 Italian ventures and concluded that CVC-associated investments have
positive effects on their portfolio companies. Based on the same data set, Bertoni et al.
(2010) observed investment behavior after a successful VC finance round. The authors
argue that the financing event can be interpreted as a removal of financial constraints
and thus one that positively influences the investment rate of ventures. This effect
holds for both IVC and CVC-backed ventures. From a long-term perspective, the equity
origin affects the sensitivity levels of investments. While IVCs reduce investment-cash
flow sensitivity through the constant withdrawal of a venture’s financial constraints,
CVC investors fail to do so in the long term.

5.4.3 Various implications

Maula et al. (2005) compared the value-added activities of IVCs and CVC vehicles
using data from ventures that received funding from both investor types. In both
cases, ventures could benefit substantially from their investors. The study highlights
that CVC units outperformed their independent counterparts by helping their portfo-
lio companies to attract new foreign customers and acquire valuable information on

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Exploring the landscape of corporate venture capital… 307

new technologies. On the other hand, IVCs offered more assistance in recruiting key
employees and in the process of restructuring the organization. The results regarding
the internationalization behavior of CVC-backed ventures emphasize that corporations
can support their portfolio companies by bridging the so-called liability of alienness
through their own track records. Regarding the internationalization of CVC-backed
ventures, LiPuma (2006) found contradictory results. Based on a sample of 1348 ven-
tures the author could not find a positive relationship between CVC funding and the
internationalization intensity of ventures.
From a founder’s perspective, Bengtsson and Wang (2010) investigated how
entrepreneurs evaluated the cooperation with their investors. By obtaining data from a
unique online community named TheFunded, where entrepreneurs anonymously rate
and share their experience within the VC industry after a funding event, the authors
showed that entrepreneurs prefer funding from IVCs. The entrepreneurs surveyed
evaluated the track record, the operating competence, and the pre-investment com-
munication (pitching efficiency) of CVC units at a significantly lower level than they
did the same aspects of IVCs. Furthermore, CVC vehicles received fewer positive
comments and more negative comments than IVCs.

5.5 Implications for corporate mothers

The literature highlights several ways in which established corporations benefit from
external venture activities. Besides the creation of firm value and learning aspects,
some authors take the benefits from the interaction of CVC and other external CV
modes such as acquisitions or alliances into account.

5.5.1 Strategic learning

Several articles focus on the concept of learning (e.g., Keil 2004; Keil et al. 2008)
through CVC. For instance, Keil (2004) introduced a model showing that established
corporations can initiate learning processes to establish CV capability. Hence, learning
processes can be stimulated in two ways. Referring to Levitt and March (1988), the
author argued that one part of this learning process takes place within the CVC triad
in the form of learning-by-doing. Moreover, corporations are able to learn from their
industry peers by filling vacant positions with experienced managers. Several authors
point to the innovation output of a corporation as a potential outcome of learning
processes. Dushnitsky and Lenox (2005b) found evidence that CVC investments could
increase a firm’s innovation rate, especially when the IP protection in the target industry
was weak; whereas Wadhwa and Kotha (2006) found that the relationship was only
valid for corporate investors with a high level of involvement with their portfolio firms;
otherwise, a higher number of CVC investments was associated with a decreasing
innovation rate. In addition, two articles are discussing the relationship between the
use of CVC and knowledge-related outcomes such as patents. While Schildt et al.
(2005) found a positive linear relationship, Lee et al. (2015) showed that beyond a
certain point the engagement in CVC can also diminish patent-driven activities.

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308 P. Röhm

Adopting a different point of view, Smith and Shah (2013), built a theoretical frame-
work to explain how user knowledge could provide corporations with more useful
and innovative insights than other sources of information. Subsequently, the relevant
hypotheses were tested using CVC transactions within the medical device industry.
It is apparent that the level of knowledge acquisition can vary and that established
corporations can benefit most by accessing knowledge from innovative users.
However, Basu and Wadhwa (2013) revealed a potential drawback of the above
notion when investigating the ways in which the use of external venturing mecha-
nisms could influence the strategic renewal tendencies of corporations. Relying on
longitudinal data, the authors argued that CVC investments are mainly used to enable
growth opportunities in existing and new businesses, but that such investments did not
result in a withdrawal from a corporation’s core business. This negative relationship
between strategic renewal and the use of CVC is heightened for corporations operating
in highly dynamic environments and with strong internal capabilities.

5.5.2 Financial effects

Some articles study the relationship between the use of CVC and corporations’ finan-
cial performance. By using Tobin’s Q as an indicator of a firm’s growth opportunities,
strategic investors can benefit from the use of CVC (Dushnitsky and Lenox 2006).
In another study, Zahra and Hayton (2008) investigated the relationship between a
firm’s external venturing activities and its financial outcomes. Using primary and sec-
ondary data, the authors found evidence that investments made through CVC funds
are positively associated with a corporation’s ROE and revenue growth. The finding
underscores the absorptive capacity of an investor. In other words, the ability to exploit
external information positively moderates the relationship between the use of CVC
and financial performance. From a financial point of view, the short-term inefficiencies
and costs of CVC initiatives can be compensated for, if corporations understand the
use of CVC as a long-term instrument.

5.5.3 CV mode interaction

While most authors test their hypothesis in a comparative setting (e.g., Keil et al.
2008; Schildt et al. 2005; Tong and Li 2011; Van de Vrande et al. 2011), only few
authors (e.g., Benson and Ziedonis 2009, 2010, Dushnitsky and Lavie 2010, Masulis
and Nahata 2011, Van de Vrande and Vanhaverbeke 2013) consider the subsequent
use of two external CV modes. While finance-related publications (see Sect. 4; such as
Benson and Ziedonis 2009, 2010) focus on the interplay of CVC and acquisitions, some
articles provide information about the interaction between CVC and the formation of
subsequent alliances.
In terms of acquisitions, Benson and Ziedonis (2010) underline possible drawbacks
involved in acquiring a venture which already received funding from a mother firm’s
own CVC unit. The study argues that the acquisition of such entrepreneurial ventures
can undermine the value of shareholders for the acquirer. A possible explanation
for acquisition premiums could be the emotional attachment of corporate managers.

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Exploring the landscape of corporate venture capital… 309

Fig. 5 Issues and neglected research streams extracted from the underlying sample

Particularly managers with a strong technical background tend to become attached to

a portfolio company’s projects and ideas and can be prone to overvalue a venture.
Analyzing 372 software firms in the 1990s, Dushnitsky and Lavie (2010) revealed
an inverted U-shaped association between the use of CVC investments and alliance
formation. Both external venturing modes are typically managed separately. For the
first time, Dushnitsky and Lavie (2010) demonstrated that both modes cannot be
considered independently. As a result, the number of CVC investments first increases
and then decreases with the total number of alliances formed. Extending these findings,
Van de Vrande and Vanhaverbeke (2013) investigated how prior CVC investments
shape the odds of establishing a strategic alliance between the supported ventures and
the corporate mother. The authors’ complementary log–log model included potential
antecedents such as market uncertainty and technological proximity. The commitment
of CVC in a prior financing round increased the probability of establishing a follow-on
strategic alliance with the venture. This relationship was positively influenced by the
technological proximity of both parties involved. The findings indicate that established
companies are more likely to form an alliance with their portfolio company if there is
a considerable overlap of technological competencies.

6 Discussion

In recent decades (see Fig. 2), the academic discussion stressed the importance of
CVC within the VC ecosystem. Accordingly, this paper contributes to this debate
by structuring and analyzing 65 empirical articles from both a bibliographical and a
content-driven point of view. In addition, the analyzed articles reveal several issues
and neglected research streams that merit future research (Fig. 5).

6.1 Cyclical nature

As Gompers and Lerner (2000) report, the use of CVC investments is strongly asso-
ciated with the general state of economic development. Early research offers insights

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310 P. Röhm

suggesting that early adopters of CV activities struggle to deal with insufficient com-
mitment (Siegel et al. 1988), the absence of a well-defined mission (Rind 1981), and an
inadequate compensation scheme based on the corporate mothers’ guidelines (Block
and Ornati 1987; Sykes 1990). Taking these considerations into account, there is a
danger that firms tend to abandon their CVC activities at too early at a stage and fail to
evaluate their future prospects correctly, especially in the face of upcoming external
shocks (zu Knyphausen-Aufsess 2005). However, recent literature has increasingly
turned to examining the antecedents of CVC unit withdrawal (e.g., Gaba and Bhat-
tacharya 2012; Gaba and Dokko 2016; Hill and Birkinshaw 2008). Only 11 of the
65 articles reviewed consider this fact when assessing the study’s observation period.
Therefore, future scholars should carefully review and argue why a specific time period
is chosen.

6.2 Comparative country approaches

Similarly to other research streams (i.e., Bruton et al. 2010), 76.9% (n = 50) of the
articles in the sample focus their empirical analysis on single countries. Only seven
articles (e.g., Hill and Birkinshaw 2008; Teppo and Wüstenhagen 2009; Zahra and Hay-
ton 2008) are based on data from at least two different geographical areas. Within the
sample, the majority of articles (n = 45; 70%) draw exclusively on data from the well-
developed US-CVC market. Because cross-border CVC investments are viewed as
important within the academic and practical discourse, and corporations from Europe
and Asia are discovering the use of CVC to reinvigorate their innovation portfolio,
single country studies are not well-suited to contribute to the understanding of how
several aspects of the CVC phenomenon can be influenced by endogenous factors
like cultural or institutional settings. Therefore, to broaden our understanding of the
worldwide CVC market, future studies should not neglect cross–cultural aspects. It
would be interesting to study the investment behavior of CVC units in light of the
geographical distance from potential target ventures by building on the approach of
Gaba and Meyer (2008).

6.3 Databases and statistical methods

Owing to the constantly increasing data coverage and quality of widely used databases
such as ThomsonOne (formerly known as VentureXpert or Venture Economics) and
VentureSource (formerly known as VentureOne), only eight studies in the sample
based their multivariate analysis on primary data. The work of Hill and Birkinshaw
(2008, 2014) and Hill et al. (2009) and the publications of Maula et al. (2003, 2005,
2009) are based on the same data, thereby reducing the number of conducted surveys.
Accordingly, future studies could benefit from using primary data to examine new
research questions; although it must be acknowledged that the CVC unit population
has proved reluctant to contribute to prior surveys (e.g., Hill and Birkinshaw 2008;
Maula et al. 2003). Nevertheless, studies relying on secondary data have shown that the
use of emerging databases can result in unique research questions that can foster CVC
research. For instance, as mentioned above, Bengtsson and Wang (2010) accessed

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Exploring the landscape of corporate venture capital… 311

TheFunded to tap into entrepreneurs’ experiences of the VC industry. Databases such

as Mattermark, Tracxn, Owler, PrivCo, Crunchbase, or Bison might also assist future
research projects to fully grasp the CVC phenomenon.
Not surprisingly, the sample is dominated by regression-based analysis. With the
exception of the work of Hill and Birkinshaw (2014), and Maula et al. (2003, 2005,
2009), all quantitative articles were based on regression analysis. Accordingly, the
use of OLS regressions (n = 19), negative binomial regressions (n = 14), and probit
regressions (n = 10) are the most common statistical methods for testing hypotheses in
the CVC setting. 2 Owing to the fact that the CVC literature is strongly influenced by
management-related journals (see Fig. 3), further research could introduce emergent
and management-related statistical methods into the field of CVC. In this vein, a
survey conducted by Kuckertz and Prochotta (2018) identified several upcoming or
neglected research methods such as multilevel modeling, data mining or qualitative
comparative analysis (QCA) that could shed light on hitherto underrepresented CVC
aspects. Owing to the fact that the CVC triad is notably hierarchical in nature, some
authors address the issue through the use of hierarchical linear models (e.g., Röhm
et al. forthcoming). Additionally, some authors use the combination of QCA and
well-established methods such as OLS to emphasize how qualitative and quantitative
methods could complement each other and therefore contribute to a multifaceted view
on specific topics (e.g., Skaaning 2007).

6.4 Isomorphic tendencies

Alongside examining the cyclical nature of CVC investments, the isomorphic tenden-
cies of a CVC unit provide an interesting starting point for further research. Primarily,
Souitaris et al. (2012) observed how CVC units structure their organization within dif-
ferent institutional environments. The authors argue that based on prevailing norms,
CVC units seek legitimacy either with their corporate parent (endoisomorphism) or
with the IVC industry (exoisomorphism). Accordingly, CVC units usually not only
operate within two different environments but also in different cultural regions. For
instance, in addition to their US headquarters, Qualcomm Ventures operates offices in
several geographical regions including Europe, India, Israel, China, and Korea. There-
fore, future research could examine how those different cultural settings influence the
process of isomorphism as such, and also address the question of whether varying
tendencies can coexist simultaneously within a CVC unit. In addition, the isomorphic
processes of CVC units could also restrict the selection of a syndication partner in a
funding round. However, their relatively small sample meant Souitaris et al. (2012)
could not relate the concept of isomorphism to performance. Therefore, future research
could link the organizational structures of CVC vehicles to performance metrics such
as the survival of a unit or to exit rates.

2 Please note, counts are not mutually exclusive due to the fact that articles could apply several statistical
methods simultaneously.

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312 P. Röhm

6.5 Governance modes

To the best of the author’s knowledge there is almost no evidence regarding the inter-
play of the CVC governance modes and performance. As Dushnitsky (2006) already
mentioned, the adoption of investment practices from IVCs can be organized in three
ways. Besides self-managed and wholly-owned subsidiaries, some corporations tend
to operate as an LP in pooled or dedicated funds, typically managed by IVCs. Those
different organizational settings (i.e., the level of autonomy or the compensation
of managers) could strengthen or weaken the potential benefits associated with the
support of portfolio companies. Other scholars might address the question of which
governmental mode is most suitable for corporations facing different circumstances.

6.6 Raison d’être

Another major academic and practical issue arises from the cyclicality of CVC activi-
ties. If a corporation is already committed to CVC, further performance measurements
and tools will be necessary to support managers trying to convey the value of a CVC
unit, especially if the unit fails to deliver the anticipated financial gains. This ques-
tion raised by Teppo and Wüstenhagen (2009) involves the way corporations develop
suitable performance metrics to measure the benefits associated with CVC. With the
exception of the work of Bassen et al. (2006), research examining this issue is non-
existent, although such new measurements could stimulate research by drawing a
clearer picture of the successful contributions of CVC.

7 Limitations

As with any research, the current study does have some technical limitations. While
VOSviewer is particularly well-suited for visualizing larger networks (Van Eck and
Waltman 2014) and its set of unique and valuable techniques is undoubtedly useful
compared to other science mapping software tools (Cobo et al. 2011), the interdis-
ciplinary approach of this literature review and the resulting sample of 65 articles
might have influenced the results provided by VOSviewer. First, owing to the under-
lying sample, journals with a relatively small number of CVC-related articles tend
to be isolated (e.g., the International Journal of Technology Management) or be
assigned to an inappropriate cluster; however, this is an issue affecting only one
paper in the current analysis. The journal Administrative Science Quarterly is grouped
with the finance-oriented literature but mainly addresses management-related top-
ics. This is confirmed by only the article of Pahnke et al. (2015) being published
in this journal. Second, this issue is strengthened by the fact that the prevailing
literature is highly heterogeneous in terms of the articles’ dates of publication (rang-
ing from 1992 to 2016) and the use of full counting, where each bibliographic
coupling link has the same weight (for a similar approach see, Van Raan 2015). Con-
sequently, to paint a holistic picture of the CVC literature, predefined VOSViewer
thresholds regarding the total number of documents constituting a source and the

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Exploring the landscape of corporate venture capital… 313

number of bibliographic coupling links were set to the appropriate minimum lev-
els.
It should be mentioned that there is an ongoing discourse questioning the
importance of received citations as a proxy for academic quality, creativity, and
impact (Wang 2014). Based on the “Matthew effect” a vast number of articles
aim to investigate the antecedents of received citations in the academic land-
scape. For instance, there is evidence that research from prestigious universities
(Crane 1965; Medoff 2006), papers published in highly-ranked journals (Judge et al.
2007; Lariviere and Gingras 2010), awards earned (Azoulay et al. 2014), and a well-
development network (Gonzalez-Brambila et al. 2013; Li et al. 2013) can positively
affect the citations of a paper, resulting in a cumulative advantage. However, Lariv-
iere and Gingras (2010) argue that the intrinsic value of an article is only a weak
signal of quality and particularly journals with a high impact factor could add a
significant quality surplus that results in a greater probability of citation. Hence, it
could be possible that the citation-based analysis such as is applied in this article
(see Figs. 3, 4) could be skewed to favor highly-ranked journals and well-established
members of the academic community. In this vein, it could be argued, that arti-
cles with a long reference list influence the presented results. It therefore seems
obvious that articles submitted to higher-ranked journals (A+ and A) tend to have
extended reference lists, since the theoretical grounding is more rigorous. That demand
for rigor means papers in A+ or A journals average 90.47 citations (SD = 36.207),
while articles published in B journals or lower draw on an average of 78.37 sources
(SD = 33.022). However, a t test showed that this difference is statistically not signif-
icant.
To expand the findings of the literature review, subsequent studies might reduce the
selection criteria applied here or adopt cut-off criteria based on impact factor, such as
the Thomson Reuters Journal Citation Reports (JCR) or the SCImago Journal Rank
(SJR) provided by Scopus to ensure quality (Bouncken et al. 2015).

8 Conclusion

To conclude, this review explored the prevailing literature within the CVC research
stream from both a bibliographical and a content-driven perspective. The article uses
a network analysis approach to emphasize the current structure within the CVC field
by introducing bibliographic methods into this particular research area. Consequently,
the bibliographic network analysis revealed that the extant work is mainly driven by
two dominant logics, management and finance. Both streams try to capture particular
facets of the CVC phenomenon from different perspectives. More precisely, because
both logics tend to separate themselves from each other, this article thoroughly exam-
ined emerging research trends and issues from a sample of 65 articles. The review
consequently outlines several paths for further work and research gaps that might
stimulate the academic discussion in the CVC context.

Acknowledgements I thank Andreas Kuckertz and Andreas Köhn, University of Hohenheim, for the
assistance in the interrater reliability proceeding and valuable comments on prior versions of this paper.

123
314 P. Röhm

Compliance with ethical standards

Conflict of interest The author declares that there is no conflict of interest regarding the publication of
this paper.

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