Stranger Knows Best: Corporate Venture Capital Investor and Third-Party Acquirers

Although the literature has theoretically pointed out both the financial and strategic implications associated with corporate venture capital (CVC) acquisitions, empirical research on this topic remains limited. Our study attempts to advance the understanding of this phenomenon by examining the market reactions to CVC acquisitions when different acquirers are involved (CVC investor acquirer vs. third-party acquirers). Specifically, we find the market reacts more positively to CVC acquisitions by third-party acquirers than by CVC investors. Furthermore, the findings show that the relationship between acquirer in-house R&D and market reactions to CVC acquisitions is moderated by whether CVC investors are the major investor pre acquisition.