Article Title

EXTERNAL CORPORATE VENTURING AND THE CHOICE BETWEEN CVC INVESTMENTS, STRATEGIC ALLIANCES AND M&AS

Abstract

Companies that use external technology sourcing when creating new business, can choose between different sourcing strategies, such as corporate venture capital investments, strategic alliances, joint ventures, and mergers and acquisitions. The choice companies have among these modes enables them to respond in a flexible way to a changing environment. Moreover, the flexibility obtained through the use of different strategies for technology sourcing affects the efficiency of open innovation. As a result, companies facing these decisions are struggling with the choice as to when to use which mode. Although previous research discussing the choice among different modes for external technology sourcing has addressed the question raised here, most studies have limited their scope to the choice among strategic alliances and M&As, neglecting the entrepreneurship perspective in which corporate venture capital is included as a distinct strategy. To get the full picture of how companies use different modes of external corporate venturing, it is important to address this question in a more comprehensive way. In this paper we will fill this gap by discussing the effect of different types of uncertainty on the use of different technology sourcing modes, including a broad range of distinct governance modes, such as corporate venture capital investments, strategic alliances, joint ventures, minority holdings, and mergers and acquisitions.

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