Corporate Venturing and the Rent Cycle

Posted: 4 Nov 2009

See all articles by Jenny Darroch

Jenny Darroch

Claremont Colleges - Claremont Graduate University

Morgan P. P Miles

University of Canterbury - Department of Management

Chris W. Paul

Georgia Southern University - Department of Finance and Economics

Date Written: 2005

Abstract

Exploring the concept of entrepreneurial rents (firm-specific superior financial performance) and proposing a rent creation-dissipation cycle are the focus of this work. The cycle proposed decomposes the Schumpeterian rent into the categories of Austrian rents and Ricardian rents. Austrian rents (economic profit) can be bid away over time, whereas Ricardian rents cannot be bid away by competition, as the source of rent is unique to the firm. Data used in the analysis were collected from interviewswith executives of 21 different corporations located in New Zealand, Sweden,the United States, and the United Kingdom from 1999 to 2003. Corporate venturing - the creation of new businesses within the corporate context - is considered a way in which to generate Schumpeterian, Austrian, and Ricardian rents. By cycling between this corporate venturing that creates entrepreneurial opportunities and venturing in a manner so as to exploitexisting rent generating opportunities, a firm can sustain its entrepreneurial rents. (SRD)

Keywords: Austrian rent, Ricardian rent, Theoretical, Firm performance, Schumpeterian rent, Competitive advantage, Corporate ventures, Competitive advantages, Innovation process

Suggested Citation

Darroch, Jenny and Miles, Morgan P. P and Paul, Chris W., Corporate Venturing and the Rent Cycle (2005). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1498265

Jenny Darroch (Contact Author)

Claremont Colleges - Claremont Graduate University ( email )

150 E. Tenth Street
Claremont, CA 91711
United States

Morgan P. P Miles

University of Canterbury - Department of Management ( email )

20 Kirkwood Ave
Upper Riccarton
Christchurch, 8041
New Zealand

Chris W. Paul

Georgia Southern University - Department of Finance and Economics ( email )

P.O. Box 815s
Statesboro, GA 30460
United States
912-681-5161 (Phone)

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