Professor Bae Jun-hyeong of Management, Published in the Academy of Management Journal (AMJ impact factor: 7.571).
- 경영대학
- Hit436
- 2021-06-07
A paper by Professor Bae Jun-hyung of Management at Sungkyunkwan University's Business School was published in the April issue of the Academy of Management Journal (AMJ Impactor: 7.571). AMJ was first published in 1957 and it is a prominent academic that ranked 8th in Management Journal and 10th in Business Journal. The paper published this time contains what investment decisions large companies make when investing in venture companies established with spin-outs. I met Professor Bae Jun-hyung and listened to a brief article related to the thesis.
Q1. Hello, Professor Bae Jun-hyeong, Please introduce yourself and your reasearch area.
I'm Bae Jun-hyeong, majoring in management at the business school. I am interested in topics related to cooperation and competition among companies based on management strategy and entrepreneurship. In particular, I am interested in making decisions in the alliance and equity investment between large and small ventures, entrepreneurs of venture companies, and technology innovation.
Q2. Please give me a detailed introduction to the journal and thesis published this time.
Recently the paper 'How technological overlap between spinouts and parents firms affects corporate venture capital investments in spinouts: The role of competitive tension' that I researched was published in Academy of Management Journal.
In this paper, I looked at what investment decisions large companies make when they make a CVC investment in a venture company established with spin-out. Spin-out refers to a venture established independently by an employee of a large company who left the company. Existing studies show that spin-outs grow successfully compared to other venture companies based on their experiences while working for large companies (mother companies) where founders used to work.
However, this study considered the negative aspects that spin-out companies might experience due to these resources. In other words, if spin-out pursues technology development similar to its parent, the parent company may be hostile to spin-out in the marketplace, which may hinder the possibility of other large companies investing in spin-out. In addition, the more aggressive a parent's tendency to protect its intellectual property rights, the less likely it is that other large companies will invest in spin-out ventures.
<Graph showing the negative relationship between spin-out and the technological commonality of the parent company and the possibility of other large companies investing in spin-out>
Negative relationships can be seen that the stronger the parent company's tendency to protect intellectual property rights.
On the other hand, there is an incentive for other large companies to invest in spin-outs. By investing in spin-outs, other large companies can indirectly acquire information about their parent's technology and ongoing research and development. Based on this logic, this paper also considers the possibility that other large companies can gain competitive advantage from spin-out investments. For example, if another large company pursues technology development similar to its parent company, or the parent company's technological innovation capabilities are excellent. In this case, we suggest that the technological commonality between spin-outs and parent companies may reduce the negative effect on the likelihood of CVC investments in spin-outs by other large companies. In this study, it was able to prove the research model by analyzing information and equity investment data about the founders of venture companies in the medical device industry in the U.S.
It can be seen that negative relationships may decrease if large companies considering equity investments seek similar technology development by their parent companies.
If the parent company's technology is excellent, it can be seen that negative relationships can decrease.
Q3. What did you find difficult (or difficult due to variables) during the study?
There are many difficulties, I want to tell two things.
The first is the process of thinking logically and writing the idea so that the reader can understand it well. I always thought about whether there were any errors or overlooks in developing the logic of my hypothesis and argument. In the process, it was difficult to revise the paper several times.
The second is data collection. As I said before, this paper requires information on the past experience of venture company founders. It took a considerable amount of time and effort to collect the past experiences of the founders of about 900 venture companies directly through various databases.
Q4. Please tell us about your future plans regarding your research activities.
We will continue to conduct various research in areas of interest. If I have a chance, I hope I can study with my school students who are interested in research and help them.