Corporate accelerators som et samarbejdsvilligt modsvar til disruptionstruslen fra startups – hvad, hvorfor og den kortsigtede investorreaktion: Et eventstudie inden for corporate venturing-området

Morten Lemb Jensen

Student thesis: Master thesis


In a rapidly changing digital world, where new technologies and business models challenge the status quo with unprecedented speed, incumbents must constantly develop and renew themselves to stay in the game. The threat of disruption is more prevalent than ever before, and young startups have proven their ability to outcompete incumbents within a very short time frame.
In parallel with the emergence of threats from disruptive startups, opportunities also arise. The open innovation paradigm has called for external collaboration to foster value creation, and in continuation of this, corporate accelerator programs have recently emerged within the corporate venturing umbrella. By joining forces with startups, value creation can be enhanced for both parties by combining complementary resources and skills.
Due to the newness of the corporate accelerator phenomenon, the research stream is still in its nascent phase, and many areas of both academic and practical interest remain uncovered. In particular, little is known about the actual value created through these (potentially) mutually beneficial relationships. This thesis will primarily investigate the corporate accelerator phenomena from the perspective of the established company, and the focal point will thus be examination of value creation through the lenses of the incumbent and its investors.
By employing the event study methodology, this thesis examined the short-term stock market reaction to announcements of corporate accelerator launches. A significant positive effect on firm value was identified. The cumulative average abnormal return was found to be +0,7% and significant, partly based on pre-announcement trading. This indicates that information leakage and trading on this private information is present. A subsequent reversal was also observed, indicating that the initial reaction is an overreaction. While the news might sound appealing, difficulties in quantifying the exact impact on future value creation could lead investors to reconsider the initial optimism brought by the announcement.
A multiple regression analysis was performed to determine factors that could explain cross sectional variations in the initial market reaction. Factors relating to both the nature of the corporate accelerator, the nature of the incumbent, and the communication surrounding the announcement were found to have an effect on the change in firm value. Especially, overwhelming evidence showed that the age of the incumbent was inversely correlated with the change in firm value. This finding might seem surprising, as one could hypothesize that the older the incumbent, the higher the need for the benefits startup collaboration could provide. A potential explanation for this is, that the investors assess the older firms to be stuck in old norms, and the lack of existing entrepreneurial culture limits the potential for corporate accelerator programs to be successful and materialize in value creation.
While the event study methodology is widely accepted in the leading finance journals, anomalies in the financial markets raise valid questions regarding the underlying efficient market hypothesis that serves as the backbone for the methodology. In the semi-strong form of the efficient market hypothesis, the pre-announcement trading effects and subsequent reversal in cumulative average abnormal returns detected in this thesis should not be able to exist. Complementary perspectives from the field of behavioral finance is thus included when appropriate to ensure a comprehensive understanding of the short-term investor behavior to news about corporate accelerator launches.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2020
Number of pages104