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Geographic technological diversification and firm innovativeness

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  • Wen, Jun
  • Zheng, Li

Abstract

This paper examines the impact of geographic technological diversification on firm innovativeness. Our empirical study conducted on a panel of U.S. manufacturing companies shows that firms with geographic technological diversification are more innovative (as measured by both patents and citations) than firms without. Furthermore, we find that the positive relation between geographic technological diversification and firm innovation is driven by domestic technological diversification, while international technological diversification is negatively related to firm innovation. Our valuation tests further confirm the detrimental effect of international technological diversification on shareholder wealth.

Suggested Citation

  • Wen, Jun & Zheng, Li, 2020. "Geographic technological diversification and firm innovativeness," Journal of Financial Stability, Elsevier, vol. 48(C).
  • Handle: RePEc:eee:finsta:v:48:y:2020:i:c:s1572308920300188
    DOI: 10.1016/j.jfs.2020.100740
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    More about this item

    Keywords

    Geographic technological diversification; Innovation; Domestic; International; R&D;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • 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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