The effect of corporate venture capital investments on the investor´s eco-innovation performance

This paper aims at investigating the relationship between firms' corporate venture capital (CVC) investments and firms’propensity to increase corporations' eco-innovation performance. CVC investments may be instrumental in accessing innovative knowledge as well as harvesting eco-innovations from entrepreneurial ventures and, therefore, an essential part of a firm’s overall innovation strategy. Using panel data from 71 CVC investors during 2010-2018, this study investigates under which CVC investment conditions firms increase their eco-innovation performance. The empirical analysis suggests that CVC investments are a mechanism to source external knowledge from ventures allowing them to improve their eco-innovation performance. Furthermore, corporations’ eco-innovation performance benefits the most when firms' CVC investments particularly target ventures in earlyinvestment stages. Additionally, corporations should focus their CVC investments on ventures that have a moderate or even low proximity to theirowntechnological knowledge base. These findings contribute to the corporate entrepreneurship, real-option, and eco-innovation literature by showing how CVC investments improve incumbents' eco-innovation performance through external knowledge sourcing