Corporate venture capital (CVC) investments and technological performance: Geographic diversity and the interplay with technology alliances

Firms are increasingly operating portfolios of geographically dispersed CVC investments for accessing a variety of location-specific knowledge, often alongside traditional external knowledge-sourcing strategies such as technology alliances. We examine the conditions under which geographic diversity in corporate venture capital (CVC) investments has positive consequences for firms' technological performance in the context of simultaneously pursued technology alliance strategies. We find that geographic diversity in CVC portfolios enhances performance as long as firms avoid knowledge redundancy in knowledge-sourcing arising from geographic overlaps with technology alliances, and the managerial complexity, coordination costs, and resource constraints stemming from the simultaneous pursuit of diversity in both technology alliances and CVC investments. Our inferences draw on a panel data set on the patents, CVC investments, and technology alliances of 55 CVC-active firms in a variety of industries.