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Multiplicative-innovation synergies: tests in technological acquisitions

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Listed:
  • Kathryn Rudie Harrigan

    () (Columbia University)

  • Maria Chiara Guardo

    () (University of Cagliari)

  • Bo Cowgill

    () (Columbia University)

Abstract

Technological innovations enjoy synergies that vary in their speed and magnitude of impact, depending upon whether they are additive or multiplicative in nature. Additive-innovation synergies build incrementally on familiar technologies (as is reflected in the technologies built upon within their patents’ respective antecedents) and the duration of their effect is shorter-lived. Multiplicative-innovation synergies arise from combining greater proportions of diverse technologies and their effects have longer duration. The most-effective organizational-learning processes accompanying exposure to exotic technology streams via technological acquisition will occur if firms have properly invested in adaptive capacity to synthesize inventions using the unfamiliar knowledge. In the first tests of innovation synergies on firm performance, we find that technological novelty in patent content improves return on assets for firms that consistently invested in R&D. Using patent-content scores to characterize whether inventors have integrated greater proportions of exotic technological antecedents into their inventions (or not), we test the impact of innovation synergies on firms’ performance after technological acquisitions. Diversification posture (which could be an alternative explanation for performance differences) is negatively-correlated with innovation synergies in our results.

Suggested Citation

  • Kathryn Rudie Harrigan & Maria Chiara Guardo & Bo Cowgill, 2017. "Multiplicative-innovation synergies: tests in technological acquisitions," The Journal of Technology Transfer, Springer, vol. 42(5), pages 1212-1233, October.
  • Handle: RePEc:kap:jtecht:v:42:y:2017:i:5:d:10.1007_s10961-016-9514-3
    DOI: 10.1007/s10961-016-9514-3
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    Cited by:

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    2. Hyun Ju Jung, 2020. "Recombination sources and breakthrough inventions: university-developed technology versus firm-developed technology," The Journal of Technology Transfer, Springer, vol. 45(4), pages 1121-1166, August.
    3. Maria Chiara Di Guardo & Kathryn Rudie Harrigan & Elona Marku, 2019. "M&A and diversification strategies: what effect on quality of inventive activity?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(3), pages 669-692, September.
    4. George Marian AEVOAE, 2018. "How Can We Create Value From Enterprise Concentrations? A Meta-Analysis Of The Scientific Literature On M&As In The European Union," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 5, pages 63-87.
    5. S. V. Kuznetsov & A. E. Miller & L. M. Davidenko, 2019. "Development Prospects of Technological Integration: Regional Perspective," Studies on Russian Economic Development, Springer, vol. 30(1), pages 15-21, January.
    6. Kathryn Rudie Harrigan & Maria Chiara Guardo & Elona Marku, 2018. "Patent value and the Tobin’s q ratio in media services," The Journal of Technology Transfer, Springer, vol. 43(1), pages 1-19, February.

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    More about this item

    Keywords

    Innovation synergy; Radical innovation; Technological synthesis; Acquisition integration; Patent reports;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • 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
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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