Creating value from the outside - announcement effects of corporate venture capital investments in the automotive industry

Abstract

The automotive industry is facing a major transformation where investments into new entrepreneurial ventures have dramatically increased. By conducting an event study, this research analyzes the short-term return effects of corporate venture capital investments to automotive manufacturers. Based on a sample of 192 investments in the automotive industry between 2008 and 2021, significant positive abnormal returns to investing firms were determined. This study further examines potential factors influencing the abnormal returns by performing a multivariate analysis. Results reveal that geographic distance and the current trends of the industry, namely autonomous driving, electrification, digitization and MaaS significantly influence abnormal returns.