Corporate venture capital (CVC) investment has become a critical source for corporations to achieve both financial and technological returns through establishing ties with new ventures. However, despite an extensive exploration on ex ante considerations for tie formation and ex post consequences of such ties (or a lack thereof), an equally important yet overlooked aspect is the dynamic process of tie termination. One particularly relevant consideration for corporate investor is the evolution of corporate technology along investment process, which goes beyond the mere avoidance of financial losses. We conceptualize such corporate technology evolution as being potentially realized in one of two pathways: the scale route or the scope route. Applying a resource dependency framework, we theorized that the two pathways impose different implications on dependence dynamics and affect tie stability in divergent ways. We also propose that the impact of dependency dynamism is moderated by the level of corporation’s overall dependence on the venture, as reflected by the venture’s technology and the dyad’s product overlap. Using a combined dataset on CVC investment and corporate new invention, we find supports for our hypotheses.

qjoanne@ceibs.edu