Corporate venture capital (CVC) is often portrayed as a “window” into novel technologies for firms, yet the extent to which firms leverage CVC investments to develop technologies in new domains remains unclear. Drawing on the absorptive capacity framework and literature on corporate venturing, we argue that CVC investments equip firms with the capabilities needed to acquire, assimilate, transform, and exploit knowledge from their investees, driving technology development in new domains. Analyzing a panel of 249 pharmaceutical and biotechnology firms, we find that firms are more likely to initiate patenting in previously unexplored domains (which we define as “technological entry”) following CVC investments in ventures operating within those domains. Additionally, we identify key factors influencing the effectiveness of CVC for technological entry: a dedicated CVC unit for exercising investments and knowledge acquisition of ventures, the involvement of CVC co-investors with domain expertise to assist with knowledge assimilation, and the relatedness of the investees’ knowledge to the firm’s existing knowledge base, which facilitates knowledge transformation and knowledge exploitation. These findings advance corporate venturing research and literature on technological entry by demonstrating that, under appropriate organizational conditions, CVC serves not only as an exploratory tool but also as a strategic lever for shaping a firm’s technological trajectory.
