Beneficial, Harmful, or Both? Effects of Corporate Venture Capital and Alliance Activity on Product Recalls

David Bendig, Simon Hensellek and Julian Schulte

Entrepreneurship Theory and Practice, 2024, vol. 48, issue 1, 35-70

Abstract: Despite growing numbers of corporate venture capital (CVC) deals and alliances, their effectiveness is not guaranteed. This paper investigates the positive and negative impacts of CVC and alliance activity on product safety under different levels of market turbulence. Using a resource-based learning perspective and panel data from large U.S. firms, we find that both CVC and alliance activity have inverted U-shaped relationships with product recall likelihood. Market turbulence moderates both relationships, but differently. We discuss how learning theory complements the resource-based view to understand why no or rather bold external venturing are less harmful than small-scale “stuck-in-the-middle†initiatives.

Keywords: product recalls; corporate venture capital; alliances; resource-based view; learning theory; market turbulence (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:48:y:2024:i:1:p:35-70

DOI: 10.1177/10422587221141682

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