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Technological activities and their impact on the financial performance of the firm: Exploitation and exploration within and between firms

Author

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  • Belderbos, Rene

    (UNU-MERIT, Maastricht University and KU Leuven)

  • Faems, Dries

    (KU Leuven)

  • Leten, Bart

    (KU Leuven)

  • Van Looy, Bart

    (KU Leuven)

Abstract

This paper analyzes the consequences for financial performance of technology strategies categorized along two dimensions: (1) explorative versus exploitative and (2) solitary versus collaborative. The financial performance implications of firms’ positioning along these two dimensions has important managerial implications, but has received only limited attention in prior studies. Drawing on organizational learning theory and technology alliances literature, a set of hypotheses on the performance implications of firms’ technology strategies are derived. These hypotheses are tested empirically on a panel dataset (1996-2003) of 168 R&D-intensive firms based in Japan, the US and Europe and situated in five different industries (chemicals, pharmaceuticals, ICT, electronics, non-electrical machinery). Patent data are used to construct indicators of explorative versus exploitative technological activities (activities in new or existing technology domains) and collaborative versus solitary technological activities (joint versus single patent ownership). The financial performance of firms is measured via a market value indicator: Tobin’s Q index.

Suggested Citation

  • Belderbos, Rene & Faems, Dries & Leten, Bart & Van Looy, Bart, 2009. "Technological activities and their impact on the financial performance of the firm: Exploitation and exploration within and between firms," MERIT Working Papers 2009-067, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2009067
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    References listed on IDEAS

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    More about this item

    Keywords

    Innovation; Tobin’s q; R&D collaboration; exploration & exploitation;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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