Research On The Mechanism Of Corporate Venture Capital,Dynamic Capacity And Corporate Performance

In the face of the current rapidly changing external environment and increasingly fierce market competition,it is increasingly important for companies to maintain a relatively stable position and competitive advantage in the industry.Corporate Venture Capital(CVC)is a special way to seek external resources across organizational boundaries.Because of its unique mode of operation,incumbent and start-up companies can efficiently complement each other’s resources through CVC,and enhance their ability to respond to environmental changes by absorbing and integrating new resources.Chinese corporate venture capital activities have developed rapidly along with the rise of a number of Internet companies and are now the backbone of the equity investment sector.It is noteworthy that the growth rate of corporate venture capital has slowed down against the backdrop of the overall contraction of the domestic equity market,and disagreements have emerged regarding the direction of corporate venture capital development.From the perspective of incumbent companies,there is an urgent need to find out the following questions: What impact does corporate venture capital have on companies? How is the impact of corporate venture capital transmitted within the company? Does it enhance the firm’s ability to sustain a long-term competitive advantage? Are there any differences in the impact of corporate venture capital investment on firms with different ownership profiles? In this paper,we expand the boundaries of corporate venture capital research by conducting a systematic study of the response mechanisms and performance of corporate venture capital on firms.There is still a lack of research on the relationship between corporate venture capital and dynamic capabilities,which are evaluated by the personal characteristics of corporate leaders,often using questionnaires to collect data,and lacking longer interval observation samples and panel data on corporate venture capital to match.In addition research on corporate venture capital focuses on technology-intensive industries,but excluding technology characteristics,there are still significant differences between firms,and exploring the differences in the impact of corporate venture capital investment by firms with different ownership nature on the firms themselves can be targeted to give some reference to related firms.This study collects the annual report data of 319 listed companies from manufacturing and Internet information technology industries in Shanghai and Shenzhen,with observation years from 2007 to 2020,constituting unbalanced panel data,and employs multiple regression fixed effects model,group regression and other analysis methods to empirically investigate the impact mechanism of corporate venture capital on dynamic capability,corporate performance and corporate venture capital in different industries,respectively.The main findings are as follows.First,corporate venture capital has a positive impact on corporate performance.The main purpose of corporate venture capital is strategic,and driven by the short-sightedness of some professional managers in pursuit of short-term gains,companies may selectively avoid such "unappealing" activities as corporate venture capital,because the resources pursued for strategic purposes are usually not considered to bring short-term gains,or even be reflected in corporate performance.in corporate performance.This may be one of the reasons why the development of corporate venturing has slowed down in recent years,while the empirical results of this study prove that corporate venturing has a direct and positive impact on firm performance.Secondly,corporate venture capital enables firms to integrate and reconfigure their internal resources with external resources,which will promote the dynamic capability of firms.The results of this study show that corporate venture capital positively contributes to three dimensions of dynamic capabilities-adaptive capacity,absorptive capacity and innovation capacity,and the contribution of corporate venture capital to absorptive capacity and innovation capacity is relatively stronger.Resource integration and organizational learning can lead to the evolution of dynamic capabilities,while corporate venture capital investment can significantly enhance dynamic capabilities through a unique inter-organizational exchange,acquiring new technologies,knowledge and ideas from startups and deep resource flows between companies.Third,dynamic capabilities play a mediating role in the effect of corporate venture capital on firm performance.The empirical results of this study show that all three dimensions of dynamic capabilities-adaptive capabilities,absorptive capabilities,and innovative capabilities-mediate the relationship between corporate venture capital and firm performance.The dynamic capability considers the various types of resources possessed by the firm as the basis of capability,and changes in the resource base will affect the dynamic capability of the firm step by step.As the core of linking enterprise resources and enterprise performance,dynamic capability is an important grip for enterprise development.Improving enterprise dynamic capability has a decisive effect on the competitive advantage of enterprises in the long run.Fourth,the nature of corporate ownership affects the contribution of corporate venture capital to dynamic capabilities.The empirical results show that the promotion of dynamic capabilities by private firms making corporate venture capital is more significant compared to state-owned enterprises.Private enterprises are more flexible,more profit-oriented,more crisis-oriented,and more motivated to develop,and they are learning and moving forward as a whole,which leads to higher dynamic capabilities.This paper constructs a research model of "corporate venture capital-dynamic capability-firm performance",reveals the mechanism of corporate venture capital on dynamic capability and firm performance,and connects the two theories on resources and capability.This paper expands the explanatory boundary of dynamic capability theory,which focuses more on the personal characteristics of corporate leaders than on dynamic capability.The paper includes ownership nature as a moderating variable and analyzes the differences in the impact of corporate venture capital on firms with different ownership nature,which expands the horizon for the study of Chinese scenarios of corporate venture capital.