Abstract:     Under the increasingly complex and volatile market environment, sustained value creation capabilities and competitive advantages are crucial and essential for enterprises. Technological innovation is regarded as an important method for enterprises to maintain their competitive advantages and market position. Nevertheless, enterprises are facing the dilemma of new technology exploration and development due to the lack of innovation resources and insufficient endogenous power mechanisms. More and more large enterprises are trying to conduct Corporate Venture Capital (CVC) programs, seeking external sources of innovation to make up for the R&D activities within the organization. CVC is an equity investment directly or indirectly provided by non-financial companies to start-up companies, which is an effective path for companies to explore innovative technologies and business models. China introduced the pattern of CVC in the 20th century. After more than two decades of development, CVC in China has begun to shape. In 2020, the total amount of CVC in China exceeds 200 billion yuan, becoming the backbone of the venture capital market that cannot be ignored. As a capital link between invested and investee companies, the significance and value of CVC has been confirmed, covering many functions such as technology innovation, capability development, market articulation and ecological construction. However, existing studies mainly focused on the micro-level impact of CVC on individual companies (investors and investees). Whether such a large-scale CVC has external spillover effects and what is the function of CVC at the meso-level have not been extensively studied.
    Based on A-share listed companies from 2008 to 2018, this paper examines the external spillover effects and spillover paths of CVC by using the data in the CV source database. The results show that: (1) CVC has significantly improved the innovation performance of peer companies, that is, the spillover effect is manifested as a positive contribution to the innovation level of peers. (2) Investor innovation (focal enterprise innovation) is a possible path for the spillover effect. The spillover effect encourages peer enterprises to innovate through dynamic competition, demonstration and imitation. Peer innovation capabilities will be continuously activated under the combined effects of passive adaptation and active learning. (3) The degree of CVC spillover effects varies in different business environment and market backgrounds. The spillover effect is significant in the situation of low industry competition and high regional marketization.
    Compared with existing studies, the main contributions of this research include the following aspects: (1) Expanding the scope of influence for CVC investment. The concept of spillover was introduced for the first time in the field of corporate venture capital, providing a new perspective on the impact of CVC for the operating behavior of peer companies. (2) Providing incremental contributions to the functional research of CVC. This paper elevates the function of CVC to the meso-level, and continue to empower the innovation level of the industry with the resource sharing and collision, technological innovation and reorganization. (3) It reveals the dual influence channels of CVC on peer innovation. This paper explains the transmission mechanism of CVC spillovers through dynamic competition, demonstration and imitation, and identifies the field and background of CVC spillovers. Meanwhile, the conclusion provides a theoretical basis for optimizing the national investment and financing policies as well as promoting collaborative innovation in the industry. (4) The intrinsic connection between corporate investment behavior and innovation activities is clarified. This paper places the conception of investment and innovation in a two-way interactive logic system, motivating companies to engage in venture capital and guiding more CVC funds to invest in innovation. It provides valuable enlightenment for enterprises to implement innovation-driven development strategies in the context of economic transformation, which is conducive to the new pattern of double-cycle development.

Key words: corporate venture capital (CVC), peer innovation, spillover effect