This paper analyzes the strategic effects of corporate venture capital investments. Specifically,
by studying the deals of 163 corporations over a four-year period, it documents the
effects of driving, emerging, enabling, and passive investments on the pool of innovative
opportunities available to incumbents and the scale efficiency gains they experience as a
result of these investments. The study suggests that by making driving and enabling investments,
incumbents position themselves in the industry to take advantage of increased
pools of innovative opportunities and improve scale efficiency yields. At the same time,
emerging and passive investments are detrimental for both of the strategic goals considered
in this paper.