Learning from rivals: how competitors shape explorative corporate venture capital

Purpose Prior research on corporate venture capital (CVC) has primarily examined whether and how intensively firms invest, while paying limited attention to how firms determine the exploratory orientation of their CVC portfolios and how such decisions are shaped by competitive dynamics. Drawing on vicarious learning theory, this study investigates how competitors' explorative CVC investments influence a focal firm's explorative CVC strategy and when imitation gives way to strategic differentiation. Design/methodology/approach Using panel data from 1,485 Chinese listed firms from 2007 to 2021, we measure explorative CVC investments based on textual similarity between parent firms and portfolio ventures. Competitive relationships are identified through text-based business-scope similarity. Hypotheses are tested using two-way fixed-effects models. Findings Results reveal an inverted U-shaped relationship between competitors' explorative CVC investments and a focal firm's exploratory investment orientation. Firms initially converge with competitors' exploratory strategies due to informational and legitimacy benefits but diverge as exploratory intensity increases and imitation costs rise. Technological advancement weakens the imitation effect, while variation in competitors' investment tendencies shows limited moderation. The nonlinear pattern is strongest in industries undergoing technological change. Originality/value This study advances CVC research by shifting attention from investment intensity to portfolio orientation and highlighting competitive learning as a driver of exploratory investment. It also contributes to competitive dynamics and vicarious learning research by showing that firms' responses to competitors' exploratory investments are bounded and non-monotonic, involving a dynamic interplay between imitation and differentiation.