Abstract

A growing body of literature acknowledges the trend towards internationalization and developing global ties in the venture capital industry (Makela & Maula, 2006). Financially, such cross-border investments are superior to the domestic ones (Wuebker, Schulze, & Kraussl, 2011). Corporate venture capital (CVC) programs, however, are often motivated by the pursuit of innovative ideas. Although the idea of sourcing R&D globally is not new (Lewin, Massini, & Peeters, 2009), the effects of the global footprint of CVC programs have not been investigated. Based on the notion of cross-cutting ties (Bae, Wezel, & Koo, 2011) where benefits are created by linking geographically dispersed countries and tying separate knowledge origins to create new knowledge essential for innovation, we suggest that the number of countries where the focal incumbent establishes its offices and/or supports new ventures is positively related to the incumbent’s innovativeness. Further, we suggest that by syndicating its deals the incumbent is trading off its less valuable domestic knowledge for the more valuable international knowledge. As such, deal syndication should positively moderate the incumbent’s innovation gains from cross-border investments.

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