The more the merrier? Inventor team size, diversity, and innovation quality

Although teamwork shows stronger innovation ability than individuals and this advantage has been increasing over time, the negative effects of larger teams also appear as the number of inventor members increases. This study discusses the double-edged sword role of inventor teams in innovation quality at two extremes: the high quality and the low quality. We argue that, inventor team size influences innovation quality because diversity works in the evolutionary process of innovation, but different types of diversity play distinct moderating roles in these relationships. Using patent data from the US pharmaceutical industry, empirical results show that there is an inverted U-shape relationship between inventor team size and high-quality innovation, and a negative relationship between inventor team size and low-quality innovation. These relationships are moderated at different degree by technological and geographic diversity. Our findings contribute to existing literature of innovation and also provide meaningful implications for innovation management.