The effect of corporate venture capital portfolio diversification on firm innovation: a replication and extension study

Abstract

This replication and extension study fails to replicate the main finding of the 2016 study “Corporate venture capital portfolios and firm innovation” (2016) which reported that the relationship between corporate venture capital portfolio diversity and firm innovation performance is inverse U-shaped. Instead, with a fixed effects negative binominal regression and panel data consisting of 99 corporate venture capital investors and ranging from 2010 to 2015, the present study finds a significant linear relationship which is positively moderated by geographic diversity and negatively moderated by investor absorptive capacity. These study findings suggest that a firm with a relatively diverse CVC portfolio has on average ~12.5% more patents than a firm with a relatively less diverse portfolio.