Technology and Market Relatedness of Corporate Venture Capital Investments at the Portfolio Level
Kwanghui Lim, Pek-hooi Soh, Annapoornima Manathattai Subramanian
Academy of Management Proceedings | The Academy of Management | Published : 2019
Corporate venture capital (CVC) is being used increasingly by established firms for exploring emerging technologies. Prior studies show that a CVC investor’s innovation performance peaks when the investor-investee dyad exhibits moderate technology relatedness. Unlike at the dyad level, we demonstrate that at the portfolio level, technology relatedness exerts a negative impact on the investor’s exploratory innovation performance, while an increase in market relatedness exacerbates the relationship. Investors should consider portfolio-level relatedness of their CVC relationships within both technology and market domains.