Corporate Venturing, allocation of talent, and competition for star managers
De Bettignies, Jean-Etienne; Chemla, Gilles (2006), Corporate Venturing, allocation of talent, and competition for star managers, AFFI (Association Française de Finance) :, 2006-12, Paris, France
Type
Communication / ConférenceDate
2006Conference title
AFFI (Association Française de Finance) :Conference date
2006-12Conference city
ParisConference country
FrancePages
18
Metadata
Show full item recordAbstract (EN)
We provide new rationales for corporate venturing (CV), based on competition for talented managers. As returns to venturing increase, firms engage in CV for reasons other than capturing these returns. First, higher venturing returns increase managerial compensation, to which firms respond by increasing the power of incentives. Managers increase effort, prompting firms to reallocate them to new ventures, where the marginal product of effort is highest. Second, as returns to venturing become large, CV emerges as a way to recruit/retain managers who would otherwise choose alternative employment. We derive several testable empirical predictions about the determinants and structure of CV.Subjects / Keywords
Failure; Investments policy; Manager; competitionRelated items
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