Please use this identifier to cite or link to this item: https://doi.org/10.1016/j.jbankfin.2005.11.005
Title: The strategic use of corporate venture financing for securing demand
Authors: Riyanto, Y.E. 
Schwienbacher, A.
Keywords: Corporate finance
Entrepreneurship
Innovation
Link between product market and financial market
Venture capital
Issue Date: 2006
Source: Riyanto, Y.E., Schwienbacher, A. (2006). The strategic use of corporate venture financing for securing demand. Journal of Banking and Finance 30 (10) : 2809-2833. ScholarBank@NUS Repository. https://doi.org/10.1016/j.jbankfin.2005.11.005
Abstract: This paper focuses on the strategic role of corporate venture financing carried out by a corporation (a headquarter). When the headquarter finances a venture through its corporate venture-financing arm, it can increase the complementarity between products of the venture and the headquarter. The effect of having an increase in complementarity is a softening of ex post product market competition with rival products. Hence, in deciding whether to finance the venture, the headquarter faces a trade-off between, on the one hand, being more aggressive ex post in the product market, and, on the other hand, using venture financing to soften ex post competition with substitute products. © 2006 Elsevier B.V. All rights reserved.
Source Title: Journal of Banking and Finance
URI: http://scholarbank.nus.edu.sg/handle/10635/22415
ISSN: 03784266
DOI: 10.1016/j.jbankfin.2005.11.005
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