Abstract
Engaging in exploration is an important source of competitive advantage for established firms. However, exploration is challenging, as it requires the utilization of knowledge outside of firm boundaries. To address this challenge, firms increasingly engage in corporate venture capital (CVC) investments, which allow for assimilation of knowledge held by young ventures. Existing findings on the relationship between CVC and firm exploration remain inconclusive, calling for the investigation of contingency factors. We address this gap by drawing from the knowledge-based view and empirically examining the effect of the organizational structure of CVC units. Further, we consider the interplay of CVCs organizational structure and firms’ diffusion and recombination capabilities for exploration performance. In doing so, the study contributes to our understanding of CVC as external knowledge sourcing mechanism, highlights limitations to this approach, and offers practical insights for corporate investors.