Asia-Pacific Journal of Business Venturing and Entrepreneurship (벤처창업연구)

The Korean Society of Business Venturing (한국벤처창업학회)
권호 표지

Macro Factors Affecting Corporate Venture Capital Investments: Effects of Industrial Boom, Exogenous Crisis, Economic Growth, Competition Intensity

기업벤처캐피탈 투자에 미치는 거시적 요인의 영향: 산업 호황, 외생적 위기, 경제 성장, 경쟁 강도를 중심으로

  • Received : 2021.05.09
  • Accepted : 2021.06.23
  • Published : 2021.08.31
Download PDF
⟨ Previous Next ⟩

Abstract

This paper inquires the macro-economic factors that may affect the corporate venture capital (CVC) from an industrial organization theory perspective. Unlike existing studies focusing CVC investments related to parent corporates' strategic intention, we identified CVC firm as an independent financial investor affected by macro environment and industrial structure. Specifically, we empirically investigate whether and how industry's boom, exogenous crisis, economic growth, and competition intensity affect the CVC investment for a data set of investment in the U.S. based corporate venture capital industry, 1996-2017. The empirical data analyzed in the study contained a total of 84 U.S. based CVC firms and their 2,306 investments from 1996 until 2017. After conducting a time-series negative binomial analysis, our empirical analyses suggest that the CVC investments are affected negatively by exogenous crisis and competition intensity, and positively by industrial boom and economic growth. we found the significance and direction of our independent variables strongly supported all of our four hypotheses in a highly robust manner. The results of this study are expected to contribute the literatures of corporate venture capital and venture investment by illustrating which macro-economic and industrial structure factors affect CVC investment decision to adapt to dynamic environmental change beside strategic intention of CVC firm's parent corporates.

이 연구는 기업벤처캐피탈에 대한 거시적경제, 산업구조적 관점에서 기업벤처케피탈 투자에 영향을 미치는 요인들에 대해 탐색한다. 기업벤처캐피탈 투자에 관한 기존 연구들이 모기업의 사업 다각화, 신규 사업 진출을 위한 기업벤처링(Corporate Venturing) 등 모기업과의 관련성을 중심으로 기업벤처캐피탈의 정체성과 투자목적에 대해 논의해온 것과 달리, 본 연구는 변화하는 거시경제적, 산업구조적 환경적 요인에 영향을 받고 이에 대응하는 독립적, 재무적 투자자로서의 기업벤처캐피탈의 정체성에 주목하여, 기업벤처캐피탈 투자에 미치는 영향을 분석한다. 이를 위해 구체적으로 산업 호황, 외생적 위기, 경제 성장, 산업 내 경쟁 강도 등과 같은 거시적 요인들이 기업벤처캐피탈 투자에 미치는 영향에 대해 1996년부터 2017년까지 84개 미국 기업벤처캐피탈의 2,306건의 투자데이터를 기반으로 실증분석하였다. 분석결과 일반적인 독립벤처캐피탈과 마찬가지로 산업이 호황이고, 경제가 성장할 때는 기업벤처캐피탈도 투자를 늘리고, 외생적 위기가 발생하거나, 기업벤처캐피탈들 간 경쟁 강도가 강할수록 투자가 줄어들 것이라는 가설이 모두 지지되었다. 주로 모기업과의 관계, 피투자회사와 모기업 사업의 관련성 등을 중심으로 기업벤처캐피탈 투자에 대해 논의했던 선행 연구들과 달리, 기업벤처캐피탈의 재무적 투자자로서의 정체성과 기업벤처캐피탈 투자에 미치는 거시경제적, 산업구조적 요인들의 영향에 대해 환기함으로써 기업벤처캐피탈 투자에 대한 논의의 폭을 확장하고, 기업벤처캐피탈 투자의사결정자들에게 거시경제적, 산업구조적 요인들에 대한 대응을 시사한다는 점에서 의의가 있다.

Keywords

References

  1. Baum, J. A., & Singh, J. V.(1994). Organizational niches and the dynamics of organizational mortality. American Journal of Sociology, 100(2), 346-380. https://doi.org/10.1086/230540
  2. Belderbos, R., Jacob, J., & Lokshin, B.(2018). Corporate venture capital (CVC) investments and technological performance: Geographic diversity and the interplay with technology alliances. Journal of Business Venturing, 33(1), 20-34. https://doi.org/10.1016/j.jbusvent.2017.10.003
  3. Black, B. S., & Gilson, R. J.(1998). Venture capital and the structure of capital markets: banks versus stock markets. Journal of Financial Economics, 47(3), 243-277. https://doi.org/10.1016/S0304-405X(97)00045-7
  4. Block, Z., & MacMillan, I.(1993). Corporate Venturing, Boston, MA: Harvard Business School Press.
  5. Bottazzi, L., & Da Rin, M.(2002). Venture Capital in Europe and the Financing of Innovative Companies, Economic Policy, 17, 229-269. https://doi.org/10.1111/1468-0327.00088
  6. Bottazzi, L., Da Rin, M., & Hellmann, T.(2008). Who are the active investors?: Evidence from venture capital. Journal of Financial Economics, 89(3), 488-512. https://doi.org/10.1016/j.jfineco.2007.09.003
  7. Campbell, A., Birkinshaw, J., Morrison, A., & van Basten Batenburg, R.(2003). The future of corporate venturing: Companies undertake venturing for a variety of reasons. MIT Sloan Management Review, 45(1), 30-38.
  8. Caves, R. E., & Pugel, T. A.(1980). Intraindustry differences in conduct and performance: viable strategies in US manufacturing industries (Vol. 734). New York, NY: New York University, Graduate School of Business Administration, Salomon Brothers Center for the Study of Financial Institutions.
  9. CB Insights.(2020). The 2020 Global CVC Report. Retrieved 2021-01.28 from https://www.cbinsights.com/research/report/corporate-venture-capital-trends-2020/.
  10. Chesbrough, H. W.(2002). Making sense of corporate venture capital. Harvard Business Review, 80(3), 90-100.
  11. Chesbrough, H. W., & Tucci, C.(2004). Corporate venture capital in the context of corporate innovation, paper presented at the DRUID Summer Conference 2004 on Industrial Dynamics. Denmark: Innovation and Development, Elsinore.
  12. Cyert, R. M., & March, J. G.(1963). A Behavioral Theory of the Firm. Englewood Cliffs: Prentice Hall.
  13. Dobrev, S., Kim, T., & Hannan, M.(2001). Dynamics of Niche Width and Resource Partitioning, American Journal of Sociology, 106(5), 1299-1337. https://doi.org/10.1086/320821
  14. Dushnitsky, G., & Lenox, M. J.(2005). When do incumbents learn from entrepreneurial ventures?: Corporate venture capital and investing firm innovation rates. Research Policy, 34(5), 615-639. https://doi.org/10.1016/j.respol.2005.01.017
  15. Dushnitsky, G., & Lenox, M. J.(2006). When does corporate venture capital investment create firm value? Journal of Business Venturing, 21(6), 753-772. https://doi.org/10.1016/j.jbusvent.2005.04.012
  16. Fried, V. H., & Hisrich, R. D.(1994). Toward a model of venture capital investment decision making, Financial Management, 23(3), 28-37. https://doi.org/10.2307/3665619
  17. Fuss, R., & Schweizer, D.(2012). Short and long-term interactions between venture capital returns and the macroeconomy: evidence for the United States. Review of Quantitative Finance and Accounting, 38(3), 391-410. https://doi.org/10.1007/s11156-011-0233-4
  18. Gompers, P., & Lerner, J.(1998). Venture capital distributions: Short-run and long-run reactions. The Journal of Finance, 53(6), 2161-2183. https://doi.org/10.1111/0022-1082.00086
  19. Gompers, P., & Lerner, J.(2001). The venture capital revolution. Journal of Economic Perspectives, 15(2), 145-168. https://doi.org/10.1257/jep.15.2.145
  20. Gompers, P., & Lerner, J.(2004). The venture capital cycle. Cmbridge, MA: MIT press.
  21. Gompers, P., Kovner, A., & Lerner, J.(2009). Specialization and success: Evidence from venture capital. Journal of Economics & Management Strategy, 18(3), 817-844. https://doi.org/10.1111/j.1530-9134.2009.00230.x
  22. Greene, W. H.(2003). Econometric Analysis. India: Pearson Education India.
  23. Hahn, M. S.(2017). Research on CorporateVenture Capital Syndication-Partner Selection, Distant Search, and Investee Performance. Doctoral Dissertation, Graduate School of Seoul National University.
  24. Hannan, M. T., & Freeman, J.(1977). The population ecology of organizations. American Journal of Sociology, 82(5), 929-964. https://doi.org/10.1086/226424
  25. Hannan, M. T., & Freeman, J.(1984). Structural inertia and organizational change. American Sociological Review, 49(2), 149-164. https://doi.org/10.2307/2095567
  26. Hill, S. A., & Birkinshaw, J.(2008). Strategy-organization configurations in corporate venture units: Impact on performance and survival. Journal of Business Venturing, 23(4), 423-444. https://doi.org/10.1016/j.jbusvent.2007.04.001
  27. Hill, S. A., & Birkinshaw, J.(2014). Ambidexterity and survival in corporate venture units. Journal of Management, 40(7), 1899-1931. https://doi.org/10.1177/0149206312445925
  28. Hochberg, Y. V., Mazzeo, M. J., & McDevitt, R. C.(2015). Specialization and competition in the venture capital industry. Review of Industrial Organization, 46(4), 323-347. https://doi.org/10.1007/s11151-015-9462-3
  29. Huergo, E., & Jaumandreu, J.(2004). How does probability of innovation change with firm age?. Small Business Economics, 22(3), 193-207. https://doi.org/10.1023/B:SBEJ.0000022220.07366.b5
  30. Inderst, R., & Muller, H. M.(2004). The effect of capital market characteristics on the value of start-up firms, Journal of Financial Economics, 72(2), 319-356. https://doi.org/10.1016/j.jfineco.2003.06.001
  31. Jo, S. K., & Han, J. H.(2018). A Case Study on The CVC's Investment Motivations and Investment Decision Factors, Asia-Pacific Journal of Business Venturing and Entrepreneurship, 13(6), 27-38. https://doi.org/10.16972/APJBVE.13.6.201812.27
  32. Keil, T., Maula, M., Schildt, H., & Zahra, S. A.(2008). The effect of governance modes and relatedness of external business development activities on innovative performance. Strategic Management Journal, 29(8), 895-907. https://doi.org/10.1002/smj.672
  33. Kim, B. G.(2017). The Impact of Corporate Venture Capital Investment Companies on Technological Innovation and Reinforcement of Export Capability, Doctoral Dissertation, Seoul Venture University.
  34. Kim, D. H.(2013). The Role of Large Companies in Entrepreneual Ecosystem, Asia-Pacific Journal of Business Venturing and Entrepreneurship. 8(2), 83-91. https://doi.org/10.16972/apjbve.8.2.201306.83
  35. Kortum, S., & Lerner, J.(2001). Does venture capital spur innovation?. The RAND Journal of Economics, 31(4), 674-692. https://doi.org/10.2307/2696354
  36. Lahti, A.(1983). Strategy and performance of a firm: An empirical investigation in the knitwear industry in Finland 1969-1981, Helsinki, Helsinki School of Economics.
  37. Lee, K. H., & Yoon, B. S.(2007). The Impact of Coporate Venture Capital on Technological Innovation in Korea and U.S.A. Korean Corporation Management Review, 14(1), 55-66.
  38. Lee, S. U., & Kang, J.(2015). Technological diversification through corporate venture capital investments: creating various options to strengthen dynamic capabilities. Industry and Innovation, 22(5), 349-374. https://doi.org/10.1080/13662716.2015.1054128
  39. Lee, S. U., Park, G., & Kang, J.(2018). The Double-edged effects of the Corporate Venture Capital Unit's Structural Autonomy or Corporate Investor's Explorative and Exploitative Innovation, Journal of Business Research, 88, 141-149. https://doi.org/10.1016/j.jbusres.2018.01.049
  40. Levinthal, D. A.(1991). Organizational adaptation and environmental selection-interrelated processes of change. Organization Science, 2(1), 140-145. https://doi.org/10.1287/orsc.2.1.140
  41. Lerner, J.(2002). Boom and Bust in the Venture Capital Industry and the Impact on Innovation, Federal Reserve Bank of Atlanta Economic Review, Fourth Quarter, 25-39.
  42. MacMillan, I. C., Block, Z., & Narasimha, P. S.(1986). Corporate venturing: Alternatives, obstacles encountered, and experience effects. Journal of Business Venturing, 1(2), 177-191. https://doi.org/10.1016/0883-9026(86)90013-3
  43. Manigart, S., & Sapienza, H.(2017). Venture capital and growth. in Sexton D. L., & Landstrom, H.(eds.) The Blackwell handbook of entrepreneurship, 240-258.
  44. March, J. G.(1991). Exploration and Exploitation in Organizational Learning, Organization Science, 2(1), 71-87. https://doi.org/10.1287/orsc.2.1.71
  45. McGrath, R. G., & Nerkar, A.(2004). Real options reasoning and a new look at the R&D investment strategies of pharmaceutical firms. Strategic Management Journal, 25(1), 1-21. https://doi.org/10.1002/smj.358
  46. Metrick, A.(2006). Venture Capital and the Finance of Innovation, Hoboken: Wiley.
  47. Patrick, R., Andreas, K., Andreas, K., & Hermann, S. D. (2018). A world of difference? The impact of corporate venture capitalists' investment motivation on startup valuation, Journal of Business Economics, 88(3), 531-557. https://doi.org/10.1007/s11573-017-0857-5
  48. Porter, M. E.(1980). Competitive strategy: Techniques for analyzing industries and competitors, New York; Free Press.
  49. Porter, M. E.(1985). Competitive Advantage. New York; Free Press.
  50. Raudenbush, S. W., & Bryk, A. S.(2002). Hierarchical linear models: Applications and data analysis methods (Vol. 1). London, UK: SAGE.
  51. Romain, A., & Van Pottelsberghe, B.(2004). The determinants of venture capital: Additional evidence.
  52. Sahaym, A., Steensma, H. K., & Barden, J. Q.(2010). The influence of R&D investment on the use of corporate venture capital: An industry-level analysis. Journal of Business Venturing, 25(4), 376-388. https://doi.org/10.1016/j.jbusvent.2008.12.001
  53. Samila, S., & Sorenson, O.(2011). Venture capital, entrepreneurship, and economic growth. The Review of Economics and Statistics, 93(1), 338-349. https://doi.org/10.1162/REST_a_00066
  54. Schildt, H. A., Maula, M. V., & Keil, T.(2005). Explorative and exploitative learning from external corporate ventures. Entrepreneurship Theory and Practice, 29(4), 493-515. https://doi.org/10.1111/j.1540-6520.2005.00095.x
  55. Schumpeter, J. A.(1934). The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Cambridge, MA. Harvard University Press.
  56. Schumpeter, J. A.(1943). Capitalism in the Postwar Period, in Harris, S.E. (ed.), Postwar Economic Problems, McGraw-Hill, New York, George Allen & Unwin.
  57. Siegel, A. W., Cousins, J. H., Rubovits, D., Parsons, J. T., Lavery, B., & Crowley, C.(1994). Adolescents' Perceptions of The Benefits and Risks of Their Own Risk-Taking, Journal of Emotional and Behavioral Disorders, 2(2), 89-98. https://doi.org/10.1177/106342669400200203
  58. Siegel, R., Siegel, E., & MacMillan, I. C.(1988). Corporate venture capitalists: Autonomy, obstacles, and performance. Journal of Business Venturing, 3(3), 233-247. https://doi.org/10.1016/0883-9026(88)90017-1
  59. Sorenson, O., & Audia, P. G.(2000). The social structure of entrepreneurial activity: Geographic concentration of footwear production in the United States, 1940-1989. American Journal of Sociology, 106(2), 424-462. https://doi.org/10.1086/316962
  60. Staw, B. M., Sandelands, L. E., & Dutton, J. E.(1981). Threat rigidity effects in organizational behavior: A multilevel analysis. Administrative Science Quarterly, 26(4), 501-524. https://doi.org/10.2307/2392337
  61. Timmons, J. A., & Bygrave, W. D.(1986). Venture capital's role in financing innovation for economic growth. Journal of Business venturing, 1(2), 161-176. https://doi.org/10.1016/0883-9026(86)90012-1
  62. Tushman, M. L., & Anderson, P.(1986). Technological discontinuities and organizational environments, Administrative Science Quarterly, 31(3), 439-465. https://doi.org/10.2307/2392832
  63. Wasmer, E., & Weil, P.(2004). The macroeconomics of labor and credit market imperfections. American Economic Review, 94(4), 944-963. https://doi.org/10.1257/0002828042002525
  64. Weick, K. E.(1988). Enacted sensemaking in crisis situations. Journal of Management Studies, 25(4), 305-317. https://doi.org/10.1111/j.1467-6486.1988.tb00039.x
  65. Weick, K. E.(1993). The collapse of sensemaking in organizations: The Mann Gulch disaster. Administrative Science Quarterly, 38(4), 628-652. https://doi.org/10.2307/2393339
  66. Wen, J., Yang, D., Feng, G. F., Dong, M., & Chang, C. P. (2018). Venture capital and innovation in China: The non-linear evidence. Structural Change and Economic Dynamics, 46, 148-162. https://doi.org/10.1016/j.strueco.2018.05.004
  67. Williams, S.(2017). Venture Capital Contract Design: An Empirical Analysis of the Connection Between Bargaining Power and Venture Financing Contract Terms. Fordham Journal of Corporate & Financial Law, 23(1), 105.
  68. Winters, T. E., & Murfin, D. L.(1988). Venture capital investing for corporate development objectives. Journal of Business Venturing, 3(3), 207-222. https://doi.org/10.1016/0883-9026(88)90015-8
  69. Yang, Y., Narayanan, V. K., & De Carolis, D. M.(2014). The relationship between portfolio diversification and firm value: The evidence from corporate venture capital activity. Strategic Management Journal, 35(13), 1993-2011. https://doi.org/10.1002/smj.2190
  70. Zider, B.(1998). How Venture Capital Works. Harvard Business Review, 76(6), 131-139.