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Using the entropy-based patent measure to explore the influences of related and unrelated technological diversification upon technological competences and firm performance

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  • Yu-Shan Chen

    (National Taipei University)

  • Ke-Chiun Chang

    (National Yunlin University of Science and Technology)

Abstract

This study applies the entropy-based patent measure to explore the influences of related technological diversification (RTD) and unrelated technological diversification (UTD) upon technological competences and firm performance. The results show that RTD has a monotonically positive effect on technological competences and UTD has an inverse U-shaped effect on technological competences. Besides, the results demonstrate that the extent of the positive influence of RTD upon technological competences is better than that of UTD upon technological competences. If American pharmaceutical companies would like to adopt technological diversification, this study suggests that they should undertake RTD, rather than UTD. In addition, this study finds out that technological competences mediate the relationship between firm performance and both of RTD and UTD. Although RTD and UTD cannot significantly influence firm performance directly, they can positively affect firm performance indirectly through technological competences.

Suggested Citation

  • Yu-Shan Chen & Ke-Chiun Chang, 2012. "Using the entropy-based patent measure to explore the influences of related and unrelated technological diversification upon technological competences and firm performance," Scientometrics, Springer;Akadémiai Kiadó, vol. 90(3), pages 825-841, March.
    • Handle: RePEc:spr:scient:v:90:y:2012:i:3:d:10.1007_s11192-011-0557-9
    DOI: 10.1007/s11192-011-0557-9
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    7. Seung-Jun Shin & Wonchul Seo, 2017. "Identifying new technology areas based on firm’s internal capabilities," Journal of Administrative and Business Studies, Professor Dr. Usman Raja, vol. 3(3), pages 114-121.
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    9. Sadowski, Bert & Nomaler, Onder & Whalley, Jason, 2016. "Technological Diversification of ICT companies into the Internet of things (IoT): A Patent -based Analysis," 27th European Regional ITS Conference, Cambridge (UK) 2016 148701, International Telecommunications Society (ITS).
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    12. Kim, Hyunwoo & Hong, Suckwon & Kwon, Ohjin & Lee, Changyong, 2017. "Concentric diversification based on technological capabilities: Link analysis of products and technologies," Technological Forecasting and Social Change, Elsevier, vol. 118(C), pages 246-257.
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