Standard linkage and innovation value: Patent level evidence from V2X technology

While a large body of literature argue that standard and standardization promote innovation, the micro mechanism through which standard enhances innovation remains an open question. To bridge this gap, this paper introduces two constructs—standard linkage and timing of standard linkage, and frames innovation as a recombination process, aiming to uncover the micro-level mechanisms by which standard linkage fosters subsequent innovation. We posit that standard linkage is positively related with patent value as it enhances the efficiency and effectiveness of knowledge search, recombination and diffusion. The timing of standard linkage has an inverted U-shaped relationship with patent value because of the joint forces of innovation effect and diffusion effect. We also examine how standardization participation moderates these relationships. To test the hypotheses, we use a dataset of 1400 Vehicle-to-Everything (V2X) patents. Our empirical findings reveal that (1) standard linkage significantly enhances the value of subsequent innovations, (2) the timing of standard linkage is crucial, as it exhibits an initially positive association with patent value which turns negative beyond a certain point, and (3) these effects hinge on firms’ standardization participation, as participants produce higher-value patents and show an earlier, flatter inverted-U link between the timing of standard linkage and patent value.