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Jean-michel Sahut, Eric Braune and Frédéric Teulon
''What drives CVC investments? An Empirical Test of Social Network Theory Predictions''
( 2017, Vol. 37 No.3 )
Using data on corporate venture capital (CVC) investments by 284 US industrial companies between 2001 and 2013, we analyze the CVC expenditures of each based on their prior position in the syndication network and their financial resources. The generalized-method-of-moments models used show that the annual amount of CVC expenditures of these companies depends on the prior number of co-financing relations they have and their cash flows in the previous year, as well as their prior investments. However, the previous centrality of the industrial companies in syndication networks is insignificant, meaning that prior centrality in the VC network does not guide their current CVC expenditures. This result goes against social network theory, which stipulates that the network members strive to improve their centrality in the network they belong.
Keywords: corporate venture capital, social network theory, financing, syndication
JEL: G2 - Financial Institutions and Services: General
C8 - Data Collection and Data Estimation Methodology; Computer Programs: General
Manuscript Received : May 26 2016 Manuscript Accepted : Aug 31 2017

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