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Age of U.S. public firms, proximity to the past patent portfolio, and innovation

Author

Listed:
  • Shotaro Yamaguchi

    (University of Wisconsin, Madison)

  • Ryuji Nitta

    (Kamigamo-Motoyama, Kyoto Sangyo University)

  • Yasushi Hara

    (Kobe University)

  • Hiroshi Shimizu

    (Waseda University
    The Research Institute of Economy, Trade and Industry)

Abstract

Previous studies have documented that firm age has a negative effect on innovation. While firm rigidity has been thought to explain this negative effect of age, it has not been measured empirically. Using the USPTO patent database, this study empirically unpacks the black box of firm age effects on innovation among U.S. public firms. We empirically measure the degree of reconfiguration in firms’ patent portfolio proximity. Our findings reveal the mediating role of rigidity in terms of adhering to the same technological focus in shaping the relationship between firm age and innovation. Furthermore, we highlight a trade-off between invention quality and quantity. Specifically, the greater patent portfolio proximity to firms’ own past is associated with diminished invention quality, albeit an increase in invention outputs. The empirical results provide a managerial implication that a sustained focus on the same technological area leads to diminished invention quality. As firms age, altering the R&D focus emerges as a crucial strategic priority, enabling them to produce higher-quality innovation outcomes.

Suggested Citation

  • Shotaro Yamaguchi & Ryuji Nitta & Yasushi Hara & Hiroshi Shimizu, 2025. "Age of U.S. public firms, proximity to the past patent portfolio, and innovation," Journal of Evolutionary Economics, Springer, vol. 35(3), pages 415-439, July.
    • Handle: RePEc:spr:joevec:v:35:y:2025:i:3:d:10.1007_s00191-025-00898-6
    DOI: 10.1007/s00191-025-00898-6
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    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • 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
    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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