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Patent portfolio diversity and firm profitability: A question of specialization or diversification?

Author

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  • Appio, Francesco P.
  • De Luca, Luigi M.
  • Morgan, Robert
  • Martini, Antonella

Abstract

The relationship between patent portfolio diversity and firm profitability is conceptually opaque and empirically equivocal. We contribute to the literature with a systematic analysis of this relationship by carrying out an empirical investigation based on a sample of 391 international firms. We generate data for patent portfolio diversity at the level of sections, classes, and sub-classes of the International Patent Classification. As moderators of this relationship, we test non-self forward citations (revealing a stream of knowledge between the firm and the outside) and non-self backward citations (assessing the firm's absorptive capacity). Findings highlight how the relationship between patent portfolio diversity and profitability is non-linear and differentially moderated by both the level of non-self forward and backward citations. Accordingly, implications for theory development and managerial decision making are discussed.

Suggested Citation

  • Appio, Francesco P. & De Luca, Luigi M. & Morgan, Robert & Martini, Antonella, 2019. "Patent portfolio diversity and firm profitability: A question of specialization or diversification?," Journal of Business Research, Elsevier, vol. 101(C), pages 255-267.
    • Handle: RePEc:eee:jbrese:v:101:y:2019:i:c:p:255-267
    DOI: 10.1016/j.jbusres.2019.04.020
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    Cited by:

    1. Barahmand, Zahir & Eikeland, Marianne, 2025. "EcoStrategic index: Economic value creation through product portfolio diversity for waste-to-x technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 214(C).
    2. Hoskins, Jake D. & Carson, Stephen J., 2022. "Industry conditions, market share, and the firm’s ability to derive business-line profitability from diverse technological portfolios," Journal of Business Research, Elsevier, vol. 149(C), pages 178-192.
    3. Kim, Nami & Kim, Eonsoo & Lee, Jongseon, 2021. "Innovating by eliminating: Technological resource divestiture and firms’ innovation performance," Journal of Business Research, Elsevier, vol. 123(C), pages 176-187.
    4. Hussinger, Katrin & Issah, Wunnam Basit, 2025. "Patents, trade secrets and performance aspirations in family firms," Journal of Business Research, Elsevier, vol. 196(C).
    5. Taglialatela, Jonathan & Barontini, Roberto, 2024. "SMEs and patents: Is it worth it? A longitudinal analysis of the patent-performance relationship," Journal of Economics and Business, Elsevier, vol. 128(C).
    6. Xinrui Zhan & Yunqing Liu & Xingxin Zhao, 2025. "The Impact of Technological Diversification on Innovation Performance: The Moderating Effects From an Agency Perspective," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 46(5), pages 2726-2745, July.
    7. Xiong, Yangchun & Lam, Hugo K.S. & Karimi, Sahar, 2024. "The effect of virtual reality-enabled manufacturing practices on production efficiency," International Journal of Production Economics, Elsevier, vol. 274(C).
    8. Ran, Rong & Zhang, Jie & Yang, Xiaoran & Chen, Yejing, 2024. "Can technological diversity drive firm resilience? Evidence from Chinese listed firms," Journal of Business Research, Elsevier, vol. 183(C).
    9. Gnekpe, Christian & Coeurderoy, Regis & Mulotte, Louis, 2023. "How a firm's knowledge base influences its external technology sourcing strategy : The case of biopharmaceutical firms," Other publications TiSEM 8f11908f-00fd-4ab3-b93f-d, Tilburg University, School of Economics and Management.
    10. You, Li & Zhang, Zongyi & Wang, Wei & Zhao, Xuezhou, 2024. "Learning from innovation award winners? Technology spillovers and firm innovation," International Review of Financial Analysis, Elsevier, vol. 92(C).
    11. Mo, Jiaying & Kong, Dongmin & Rong, Zhao & Yu, Li, 2025. "Technological diversification and resilience to systematic risk: Evidence from listed firms in China," International Review of Economics & Finance, Elsevier, vol. 99(C).
    12. Ai Linh Nguyen & Wenyuan Liu & Khiam Aik Khor & Andrea Nanetti & Siew Ann Cheong, 2022. "Strategic differences between regional investments into graphene technology and how corporations and universities manage patent portfolios," Papers 2208.03719, arXiv.org.
    13. Li, Lanhua & Xin, Daqi & Yang, Xi & Yu, Xiaodan, 2025. "How does patent portfolio structure affect patent value in different technological environments? Evidence from Chinese high-tech industries," Technological Forecasting and Social Change, Elsevier, vol. 215(C).
    14. Hussinger, Katrin & Issah, Wunnam Basit, 2025. "Patents, trade secrets and performance aspirations in family firms," ZEW Discussion Papers 25-029, ZEW - Leibniz Centre for European Economic Research.
    15. Sergio Cuéllar & Maria Teresa Fernandez-Bajón & Felix Moya Anegón, 2024. "A New Approach to Measure Absorptive Capacity and Appropriability: a Case of Study in Emerging Markets," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(3), pages 15418-15446, September.
    16. Powell, K. Skylar & Lim, Eunah, 2022. "All or nothing: International coalitions responding to competing pressures in challenges to IP rights," Journal of International Management, Elsevier, vol. 28(3).
    17. Li, Liping & Chen, Qisheng & Li, Jing & Chen, Jin & Jia, Ximeng, 2024. "The impact of board capital on open innovation with the moderating effect of executive equity incentives," Research in International Business and Finance, Elsevier, vol. 72(PA).
    18. Keungoui Kim & Alberto Nonnis & Altay Özaygen & Dieter F. Kogler, 2023. "Green-tech firm creation in Germany: the role of regional knowledge," International Entrepreneurship and Management Journal, Springer, vol. 19(1), pages 97-120, March.
    19. Papazoglou, Michalis E. & Spanos, Yiannis E., 2021. "“Influential knowledge and financial performance: The role of time and rivals’ absorptive capacity”," Technovation, Elsevier, vol. 102(C).
    20. Vera Ivanyuk, 2022. "Proposed Model of a Dynamic Investment Portfolio with an Adaptive Strategy," Mathematics, MDPI, vol. 10(23), pages 1-19, November.
    21. Changchun Li & Sen Wang, 2022. "Digital Optimization, Green R&D Collaboration, and Green Technological Innovation in Manufacturing Enterprises," Sustainability, MDPI, vol. 14(19), pages 1-20, September.

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