Why do incumbents fund startups? A study of the antecedents of corporate venture capital in China

Dushnitsky, G and Yu, L (2022) Why do incumbents fund startups? A study of the antecedents of corporate venture capital in China. Research Policy, 51 (3). p. 104463. ISSN 0048-7333 (In Press) OPEN ACCESS

Abstract

Established firms are instrumental in funding entrepreneurial ventures, a practice known as corporate venture capital (CVC). Yet, our knowledge of the reasons firms engage in CVC is calibrated mainly on data from the United States and Europe. Such a restricted focus limits our understanding of CVC practices and objectives. Accordingly, we adopt an abductive approach to study the antecedents of CVC in China. The country is a vibrant entrepreneurial setting, second only to the USA in total startup numbers and funding amounts. We construct a comprehensive data of Chinese CVCs during the late 2010s by integrate Chinese and international databases. Cross-industry analyses of CVC patterns underscore a novel objective; one that is predominantly associated with harnessing growth through market expansion rather than the prevailing view of CVC as a window on technology. The findings mirror the features of the Chinese setting, where entrepreneurs profit from the dramatic expansion in economic activity and serve as a vehicle to leverage the global innovation frontier.

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Item Type: Article
Subject Areas: Strategy and Entrepreneurship
Additional Information:

© 2021 The Author(s). Published by Elsevier B.V. This is an open access article under the Creative Commons CC BY-NC-ND licence

Funder Name: National Natural Science Foundation of China, National Natural Science Foundation of China, National Natural Science Foundation of China
Date Deposited: 11 Jan 2022 16:12
Date of first compliant deposit: 11 Jan 2022
Subjects: China
Entrepreneurs
Venture capital companies
Last Modified: 20 Jan 2022 18:00
URI: https://lbsresearch.london.edu/id/eprint/2193
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