拉斯维加斯9888

标题：TOLERANCE FOR FAILURE AND CORPORATE INNOVATION

汇报人：Xuan Tian (IndianaUniversity)

功夫：3月17日（周三）10:00-11:30am

地址：拉斯维加斯9888新楼217教室

提要：We examine whether tolerance for failure spurs corporate innovation based on a sample of venture capital (VC) backed IPO firms. We develop a novel measure of VC investors’ failure tolerance. We find that IPO firms backed by more failure-tolerant VC investors are significantly more innovative. A rich set of empirical tests shows that this result is not driven by the endogenous matching between failure-tolerant VCs and startups with high ex-ante innovation potentials. Further, we find that being financed by a failure-tolerant VC is much more important for ventures with high innovation potentials than for those with low potentials. We also find that the effect of failure tolerance on innovation persists long after VC investors exit the IPO firms, and the effect is even more persistent if the startup firms start to interact with the VCs in the firms’ early development stages. Such persistence suggests that VC investors’ attitudes towards failure have likely been internalized by the startup firms and become part of the firms’ culture.