Corporate Investment Relationships and the Search for Innovations: An Examination of Startups’ Search Shift Toward Incumbents

Published Online:https://doi.org/10.1287/orsc.2020.1421

References

  • Abernathy WJ , Utterback JM (1978) Patterns of industrial innovation. Tech. Rev. 80(7):40–47.Google Scholar
  • Acs ZJ , Audretsch DB (1987) Innovation, market structure, and firm size. Rev. Econom. Statist. 69(4):567–574.CrossrefGoogle Scholar
  • Agarwal R , Audretsch D , Sarkar MB (2007) The process of creative destruction: Knowledge spillovers, entrepreneurship, and economic growth. Strategic Entrepreneurship J. 1:263–286.CrossrefGoogle Scholar
  • Ahuja G , Katila R (2004) Where do resources come from? The role of idiosyncratic situations. Strategic Management J. 25(8–9):887–907.CrossrefGoogle Scholar
  • Ahuja G , Lampert C (2001) Entrepreneurship in the large corporation: A longitudinal study of how established firms create breakthrough inventions. Strategic Management J. 22(6–7):521–543.CrossrefGoogle Scholar
  • Ahuja G , Lampert CM , Tandon V (2013) Paradigm-changing vs. paradigm-deepening innovation: How firm scope influences firm technological response to shocks. Organ. Sci. 25(3):653–669.LinkGoogle Scholar
  • Ahuja G , Polidoro F Jr , Mitchell W (2009) Structural homophily or social asymmetry? The formation of alliances by poorly embedded firms. Strategic Management J. 30(9):941–958.CrossrefGoogle Scholar
  • Alvarez‐Garrido E , Dushnitsky G (2016) Are entrepreneurial venture’s innovation rates sensitive to investor complementary assets? Comparing biotech ventures backed by corporate and independent VCs. Strategic Management J. 37(5):819–834.CrossrefGoogle Scholar
  • Arrow K (1962) Economic welfare and the allocation of resources for invention. The Rate and Direction of Inventive Activity: Economic and Social Factors (Princeton University Press, Princeton, NJ).CrossrefGoogle Scholar
  • Azoulay P (2002) Do pharmaceutical sales respond to scientific evidence? J. Econom. Management Strategy 11(4):551–594.CrossrefGoogle Scholar
  • Baum JA , Calabrese T , Silverman BS (2000) Don’t go it alone: Alliance network composition and startups’ performance in Canadian biotechnology. Strategic Management J. 21(3):267–294.CrossrefGoogle Scholar
  • Balachandran S , Hernandez E (2019) Networks and innovation: Accounting for structural and institutional sources of recombination in brokerage triads. Organ. Sci. 29(2):80–99.Google Scholar
  • Benner MJ , Ranganathan R (2013) Divergent reactions to convergent strategies: Investor beliefs and analyst reactions during technological change. Organ. Sci. 24(2):378–394.LinkGoogle Scholar
  • Berry H , Guillén MF , Zhou N (2010) An institutional approach to cross-national distance. J. Internat. Bus. Stud. 41(9):1460–1480.CrossrefGoogle Scholar
  • Blackwell M , Iacus SM , King G , Porro G (2009) cem: Coarsened exact matching in Stata. Stata J. 9(4):524–546.CrossrefGoogle Scholar
  • Bodewitz H , Buurma H , Devries G (1987) Regulatory science and the social management of trust in medicine. Bijker WE , Hughes TP , eds. The Social Construction of Technological Systems (MIT Press, Cambridge, MA), 243–260.Google Scholar
  • Ceccagnoli M , Graham SJ , Higgins MJ , Lee J (2010) Productivity and the role of complementary assets in firms’ demand for technology innovations. Indust. Corporate Change 19(3):839–869.CrossrefGoogle Scholar
  • Chatterji AK (2009) Spawned with a silver spoon? Entrepreneurial performance and innovation in the medical device industry. Strategic Management J. 30(2):185–206.CrossrefGoogle Scholar
  • Chemmanur TJ , Loutskina E , Tian X (2014) Corporate venture capital, value creation, and innovation. Rev. Financial Stud. 27(8):2434–2473.CrossrefGoogle Scholar
  • Christensen CM , Bower JL (1996) Customer power, strategic investment, and the failure of leading firms. Strategic Management J. 17(3):197–218.CrossrefGoogle Scholar
  • Cohen WM , Levinthal DA (1990) Absorptive capacity: a new perspective on learning and innovation. Admin. Sci. Quart. 35(1):128–152.CrossrefGoogle Scholar
  • Cunningham C , Ederer F , Ma S (2020) Killer acquisitions. J. Political Econom. , ePub ahead of print, https://doi.org/10.1086/712506.Google Scholar
  • Cyert RM , March JG (1963) A Behavioral Theory of the Firm (Prentice-Hall, Englewood Cliffs, NJ).Google Scholar
  • Drews J (2003) Strategic trends in the drug industry. Drug Discovery Today 8(9):411–420.CrossrefGoogle Scholar
  • Drover W , Busenitz L , Matusik S , Townsend D , Anglin A , Dushnitsky G (2017) A review and road map of entrepreneurial equity financing research: Venture capital, corporate venture capital, angel investment, crowdfunding, and accelerators. J. Management 43(6):1820–1853.CrossrefGoogle Scholar
  • Dushnitsky G , Lenox MJ (2005a) When do firms undertake R&D by investing in new ventures? Strategic Management J. 26(10):947–965.CrossrefGoogle Scholar
  • Dushnitsky G , Lenox MJ (2005b) When do incumbents learn from entrepreneurial ventures?: Corporate venture capital and investing firm innovation rates. Res. Policy 34(5):615–639.CrossrefGoogle Scholar
  • Dushnitsky G , Lenox MJ (2006) When does corporate venture capital investment create firm value? J. Bus. Venturing 21(6):753–772.CrossrefGoogle Scholar
  • Dushnitsky G , Shapira Z (2010) Entrepreneurial finance meets organizational reality: Comparing investment practices and performance of corporate and independent venture capitalists. Strategic Management J. 31(9):990–1017.CrossrefGoogle Scholar
  • Dussauge P , Garrette B , Mitchell W (2000) Learning from competing partners: Outcomes and durations of scale and link alliances in Europe, North America and Asia. Strategic Management J. 21(2):99–126.CrossrefGoogle Scholar
  • Dyer JH , Singh H (1998) The relational view: Cooperative strategy and sources of interorganizational competitive advantage. Acad. Management Rev. 23(4):660–679.CrossrefGoogle Scholar
  • Fleming L (2001) Recombinant uncertainty in technological search. Management Sci. 47(1):117–132.LinkGoogle Scholar
  • Gans JS , Stern S (2003) The product market and the market for “ideas”: Commercialization strategies for technology entrepreneurs. Res. Policy 32(2):333–350.CrossrefGoogle Scholar
  • Garud R , Rappa MA (1994) A socio-cognitive model of technology evolution: The case of cochlear implants. Organ. Sci. 5(3):344–362.LinkGoogle Scholar
  • Gilbert RJ , Newbery DM (1982) Preemptive patenting and the persistence of monopoly. Amer. Econom. Rev. 72(3):514–526.Google Scholar
  • Gimeno J (2004) Competition within and between networks: The contingent effect of competitive embeddedness on alliance formation. Acad. Management J. 47(6):820–842.CrossrefGoogle Scholar
  • Giustiziero G , Kaul A , Wu B (2019) The dynamics of learning and competition in Schumpeterian environments. Organ. Sci. 30(4):668–693.LinkGoogle Scholar
  • Gulati R , Gargiulo M (1999) Where do interorganizational networks come from? Amer. J. Sociol. 104(5):1439–1493.CrossrefGoogle Scholar
  • Hall BH , Jaffe AB , Trajtenberg M (2001) The NBER Patent Citation Data File: Lessons, Insights, and Methodological Tools. NBER Working Paper No w8498, National Bureau of Economic Research, Cambridge, MA.CrossrefGoogle Scholar
  • Hallen BL , Katila R , Rosenberger JD (2014) How do social defenses work? A resource-dependence lens on technology ventures, venture capital investors, and corporate relationships. Acad. Management J. 57(4):1078–1101.CrossrefGoogle Scholar
  • Helfat CE (1994) Evolutionary trajectories in petroleum firm R&D. Management Sci. 40(12):1720–1747.LinkGoogle Scholar
  • Henderson RM (1993) Underinvestment and incompetence as responses to radical innovation: Evidence from the photolithographic alignment equipment industry. RAND J. Econom. 24(2):248–270.CrossrefGoogle Scholar
  • Henderson RM , Clark KB (1990) Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Admin. Sci. Quart. 35(1):9–30.CrossrefGoogle Scholar
  • Holland PW (1986) Statistics and causal inference. J. Amer. Statist. Assoc. 81(396):945–960.CrossrefGoogle Scholar
  • Kaplan S , Vakili K (2015) The double‐edged sword of recombination in breakthrough innovation. Strategic Management J. 36(10):1435–1457.CrossrefGoogle Scholar
  • Katila R , Ahuja G (2002) Something old, something new: A longitudinal study of search behavior and new product introduction. Acad. Management J. 45(6):1183–1194. and Ranganathan 2013CrossrefGoogle Scholar
  • Katila R , Rosenberger JD , Eisenhardt KM (2008) Swimming with sharks: Technology ventures, defense mechanisms and corporate relationships. Admin. Sci. Quart. 53(2):295–332.CrossrefGoogle Scholar
  • Kneeland MK , Schilling MA , Aharonson BS (2020) Exploring uncharted territory: Knowledge search processes in the origination of outlier innovation. Organ. Sci. 31(3):535–557.LinkGoogle Scholar
  • Kleinbaum D , Kupper L , Muller K , Nizam A (1988) The correlation coefficient and straight-line regression analysis. Kleinbaum D, Kupper L, Muller K, Nizam A. Applied Regression Analysis and Other Multivariable Methods (Wadsworth Publishing Company, Belmont, CA), 80–95.Google Scholar
  • Kogut B (1988) Joint ventures: Theoretical and empirical perspectives. Strategic Management J. 9(4):319–332.CrossrefGoogle Scholar
  • Lampert C , Kim M , Polidoro F (2020) Branching and anchoring: Complementary asset configurations in conditions of Knightian uncertainty. Acad. Management Rev . 45(4): 847–868.Google Scholar
  • Lane PJ , Lubatkin M (1998) Relative absorptive capacity and interorganizational learning. Strategic Management J. 19(5):461–477.CrossrefGoogle Scholar
  • Levinthal DA (1991) Organizational adaptation and environmental selection-interrelated processes of change. Organ. Sci. 2(1):140–145.LinkGoogle Scholar
  • Levinthal DA (1992) Surviving Schumpeterian environments: An evolutionary perspective. ICC . 1(3):427–443.Google Scholar
  • Levinthal DA (1997) Adaptation on rugged landscapes. Management Sci. 43(7):934–950.LinkGoogle Scholar
  • March JG (1991) Exploration and exploitation in organizational learning. Organ. Sci. 2(1):71–87.LinkGoogle Scholar
  • Maula MV , Keil T , Zahra SA (2013) Top management’s attention to discontinuous technological change: Corporate venture capital as an alert mechanism. Organ. Sci. 24(3):926–947.LinkGoogle Scholar
  • Nelson RR , Winter SG (1982) An Evolutionary Theory of Economic Change (Harvard University Press, Boston).Google Scholar
  • Paik Y , Woo H (2017) The effects of corporate venture capital, founder incumbency, and their interaction on entrepreneurial firms’ R&D investment strategies. Organ. Sci. 28(4):670–689.LinkGoogle Scholar
  • Pahnke EC , Katila R , Eisenhardt KM (2015) Who takes you to the dance? How partners’ institutional logics influence innovation in young firms. Admin. Sci. Quart. 60(4):596–633.CrossrefGoogle Scholar
  • Park HD , Steensma HK (2012) When does corporate venture capital add value for new ventures? Strategic Management J. 33(1):1–22.CrossrefGoogle Scholar
  • Pfeffer J , Novak P (1976) Joint ventures and interorganizational interdependence. Admin. Sci. Quart. 21(3):398–418.CrossrefGoogle Scholar
  • Phene A , Fladmoe‐Lindquist K , Marsh L (2006) Breakthrough innovations in the US biotechnology industry: The effects of technological space and geographic origin. Strategic Management J. 27(4):369–388.CrossrefGoogle Scholar
  • Pisano GP (1990) The R&D boundaries of the firm: An empirical analysis. Admin. Sci. Quart . 35(1):153–176.Google Scholar
  • Polidoro F Jr (2013) The competitive implications of certifications: The effects of scientific and regulatory certifications on entries into new technical fields. Acad. Management J. 56(2):597–627.CrossrefGoogle Scholar
  • Polidoro F Jr (2020) Knowledge, routines, and cognitive effects in nonmarket selection environments: An examination of the regulatory review of innovations. Strategic Management J. 41(13):2400–2435.CrossrefGoogle Scholar
  • Polidoro F Jr , Theeke M (2012) Getting competition down to a science: The effects of technological competition on firms’ scientific publications. Organ. Sci. 23(4):1135–1153.LinkGoogle Scholar
  • Powell WW , Koput KW , Smith-Doerr L (1996) Interorganizational collaboration and the locus of innovation: Networks of learning in biotechnology. Admin. Sci. Quart. 41(1):116–145.CrossrefGoogle Scholar
  • Reinganum MR (1983) The anomalous stock market behavior of small firms in January: Empirical tests for tax-loss selling effects. J. Financial Econom. 12(1):89–104.CrossrefGoogle Scholar
  • Rosenkopf L , Almeida P (2003) Overcoming local search through alliances and mobility. Management Sci. 49(6):751–766.LinkGoogle Scholar
  • Rosenkopf L , Nerkar A (2001) Beyond local search: boundary‐spanning, exploration, and impact in the optical disk industry. Strategic Management J. 22(4):287–306.CrossrefGoogle Scholar
  • Schoonhoven CB , Eisenhardt KM , Lyman K (1990) Speeding products to market: Waiting time to first product introduction in new firms. Admin. Sci. Quart. 35(1):177–207.CrossrefGoogle Scholar
  • Schumpeter JA (1934) The Theory of Economic Development (Harvard University Press, Cambridge, MA).Google Scholar
  • Schumpeter JA (1950) Capitalism, Socialism and Democracy , 3rd ed. (Harper, New York).Google Scholar
  • Schweitzer SO (1997) Pharmaceutical Economics and Policy (Oxford University Press, New York).Google Scholar
  • Shan W , Walker G , Kogut B (1994) Interfirm cooperation and startup innovation in the biotechnology industry. Strategic Management J. 15(5):387–394.CrossrefGoogle Scholar
  • Shane S (2001) Technological opportunities and new firm creation. Management Sci. 47(2):205–220.LinkGoogle Scholar
  • Sørensen JB , Stuart TE (2000) Aging, obsolescence, and organizational innovation. Admin. Sci. Quart. 45(1):81–112.CrossrefGoogle Scholar
  • Stuart TE , Hoang H , Hybels RC (1999) Interorganizational endorsements and the performance of entrepreneurial ventures. Admin. Sci. Quart. 44(2):315–349.CrossrefGoogle Scholar
  • Suarez FF , Utterback JM (1995) Dominant designs and the survival of firms. Strategic Management J. 16(6):415–430.CrossrefGoogle Scholar
  • Teece DJ (1986) Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy. Res. Policy 15(6):285–305.CrossrefGoogle Scholar
  • Theeke M , Polidoro F Jr , Fredrickson JW (2018) Path-dependent routines in the evaluation of novelty: The effects of innovators’ new knowledge use on brokerage firms’ coverage. Admin. Sci. Quart. 63(4):910–942.CrossrefGoogle Scholar
  • Tong TW , Li Y (2011) Real options and investment mode: Evidence from corporate venture capital and acquisition. Organ. Sci. 22(3):659–674.LinkGoogle Scholar
  • Tushman ML , Anderson P (1986) Technological discontinuities and organizational environments. Admin. Sci. Quart. 31(3):439–465.CrossrefGoogle Scholar
  • Tushman ML , Rosenkopf L (1992) Organizational determinants of technological-change-toward a sociology of technological evolution. Res. Organ. Behav. 14:311–347.Google Scholar
  • Wadhwa A , Kotha S (2006) Knowledge creation through external venturing: Evidence from the telecommunications equipment manufacturing industry. Acad. Management J. 49(4):819–835.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.