Organization and Financing of Innovation, and the Choice between Corporate and Independent Venture Capital

Autor:	Paolo Fulghieri, Merih Sevilir
Rok vydání:	2009
Předmět:	Finance Economics and Econometrics Product innovation business.industry Corporate venture capital Venture capital Competitive advantage Competition (economics) Internal financing Accounting Organizational structure Business Industrial organization
Zdroj:	Journal of Financial and Quantitative Analysis. 44:1291-1321
ISSN:	1756-6916 0022-1090
DOI:	10.1017/s0022109009990391
Popis:	This paper examines the impact of competition on the optimal organization and financing structures in innovation-intensive industries. We show that as an optimal response to competition, firms may choose external organization structures established in collaboration with specialized start-ups where they provide start-up financing from their own resources. As the intensity of the competition to innovate increases, firms move from internal to external organization of projects to increase the speed of product innovation and to obtain a competitive advantage with respect to rival firms in their industry. We also show that as the level of competition increases, firms provide a higher level of financing for externally organized projects in the form of corporate venture capital (CVC). Our results help explain the emergence of organization and financing arrangements such as CVC and strategic alliances, where large established firms organize their projects in collaboration with external specialized firms and provide financing for externally organized projects from their own internal resources.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::7b72380952794e67fbc53a39e68b3d4c https://doi.org/10.1017/s0022109009990391 Zobrazit plný text záznamu Plný text ve formátu PDF