Özyeğin University, Çekmeköy Campus Nişantepe District, Orman Street, 34794 Çekmeköy - İSTANBUL

Phone : +90 (216) 564 90 00

Fax : +90 (216) 564 99 99

E-mail: info@ozyegin.edu.tr

24.02.2020 - 24.02.2020

Faculty of Business Seminar Series / Fatima Shuwaikh

Özyeğin Üniversitesi
Orman Sk
Nişantepe Mahallesi, Çekmeköy, İstanbul 34794

 

Date: Monday, Feb 24th, 2020

Time: 13:30-15:00

Location: AB2, Meeting Room 345

 Title: THE IMPACT OF THE ABILITY TO LEVERAGE INVESTORS’ COMPLEMENTARY RESOURCES ON ENTREPRENEURIAL COMPANY’S INNOVATION OUTPUT: EVIDENCE FROM VENTURE-BACKED BIOTECH COMPANIES

 Abstract: Entrepreneurial companies are a vital source of innovation and are financed by investors with different profiles. Therefore, we assert that entrepreneurial companies can no longer be studied as a homogeneous group. Instead, we focus on the inherent dichotomy in the profiles of independent venture capitalists (IVCs) and corporate investors to examine companies’ innovation outcomes. Our sample consists of 1547 U.S. biotechnology companies founded between 1998 and 2013 and financed by IVCs or corporate investors. We analyze how corporate venture capital (CVC) differs from independent venture capital (IVC) in nurturing innovation in entrepreneurial companies. We find that CVC-backed companies display higher rates of innovation output, as measured by their patenting outcomes, than their IVC-backed counterparts. Moreover, the performance of CVC-backed companies is responsive to their ability to leverage the complementary resources of corporate investors as in-house specialists and marketing and regulatory experts. We suggest a proper mechanism underscoring the role of CVC funding. Our baseline outcomes provide proof that is compatible with three underlying mechanisms: the first mechanism is the absorptive capacity of entrepreneurial companies to absorb, realize and apply new technology, resources and information. The other two mechanisms are tie strength, which reflects the relatedness in the business description between the investor and the company, and geographic proximity, which is the distance between them.