There is a growing trend by established firms to use a multitude of External Corporate Venturing (ECV) mechanisms (alliances, partnerships, joint ventures, acquisitions, licensing agreements and investments in corporate venture capital) to acquire external innovations. In this paper, we develop a framework within which firms choose ECV mechanisms that are best aligned with characteristics of the target company. More precisely, we investigate the effect of relatedness and uncertainty on governance mode choices by combining the Resource-based View of the firm and Real Options Theory. We propose a bi-dimensional matrix to show under which conditions of relatedness and uncertainty corporations choose among corporate venture capital, strategic alliance, joint venture and acquisition. Finally, we present a dynamic perspective to assess how these different forms of ECV transit over time, once part of uncertainty is resolved and a certain level of familiarity with the new knowledge is achieved.

An integration of the resource based view and real options theory for investments in outside opportunities

TOSCHI, LAURA;
2009

Abstract

There is a growing trend by established firms to use a multitude of External Corporate Venturing (ECV) mechanisms (alliances, partnerships, joint ventures, acquisitions, licensing agreements and investments in corporate venture capital) to acquire external innovations. In this paper, we develop a framework within which firms choose ECV mechanisms that are best aligned with characteristics of the target company. More precisely, we investigate the effect of relatedness and uncertainty on governance mode choices by combining the Resource-based View of the firm and Real Options Theory. We propose a bi-dimensional matrix to show under which conditions of relatedness and uncertainty corporations choose among corporate venture capital, strategic alliance, joint venture and acquisition. Finally, we present a dynamic perspective to assess how these different forms of ECV transit over time, once part of uncertainty is resolved and a certain level of familiarity with the new knowledge is achieved.
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Toschi L.; Kulatilaka N.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11585/97880
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