IDEAS home Printed from https://ideas.repec.org/p/kof/wpskof/13-336.html
   My bibliography  Save this paper

Technological Diversification and Innovation Performance

Author

Abstract

This paper analyzes the impact of technological diversity on innovation inputs and success using Swiss firm-level panel data. While we do not find any impact of diversity on R&D intensity, we confirm a positive impact of diversity on patent applications as suggested by the literature. However, since patent applications reflect an intermediate innovation input rather than output, we extend the analysis to the share of sales generated by new products. We find a significant negative effect of diversity on the sales share of new products. Hence, technologically more specialized firms have a lower propensity to patent and greater shares of new products. We find neither a direct nor indirect effect of diversity on the sales share generated by improved products. These results suggest that specialization pays-off through more drastic innovations that yield greater market success through a passing monopoly status.

Suggested Citation

  • Thomas Bolli & Martin Woerter, 2013. "Technological Diversification and Innovation Performance," KOF Working papers 13-336, KOF Swiss Economic Institute, ETH Zurich.
    • Handle: RePEc:kof:wpskof:13-336
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.3929/ethz-a-009789998
    Download Restriction: no

    References listed on IDEAS

    as
    1. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    2. Gambardella, Alfonso & Torrisi, Salvatore, 1998. "Does technological convergence imply convergence in markets? Evidence from the electronics industry," Research Policy, Elsevier, vol. 27(5), pages 445-463, September.
    3. Lynne G. Zucker & Michael R. Darby & Jeff S. Armstrong, 2003. "Commercializing knowledge: university science, knowledge capture and firm performance in biotechnology," Proceedings, Federal Reserve Bank of Dallas, issue Sep, pages 149-170.
    4. Danzon, Patricia M. & Nicholson, Sean & Pereira, Nuno Sousa, 2005. "Productivity in pharmaceutical-biotechnology R&D: the role of experience and alliances," Journal of Health Economics, Elsevier, vol. 24(2), pages 317-339, March.
    5. Peneder, Michael, 2010. "Technological regimes and the variety of innovation behaviour: Creating integrated taxonomies of firms and sectors," Research Policy, Elsevier, vol. 39(3), pages 323-334, April.
    6. Garcia-Vega, Maria, 2006. "Does technological diversification promote innovation?: An empirical analysis for European firms," Research Policy, Elsevier, vol. 35(2), pages 230-246, March.
    7. Martin Woerter, 2009. "Technology diversification, product innovations, and technology transfer," KOF Working papers 09-221, KOF Swiss Economic Institute, ETH Zurich.
    8. Kwaku Atuahene-Gima & Felicitas Evangelista, 2000. "Cross-Functional Influence in New Product Development: An Exploratory Study of Marketing and R...D Perspectives," Management Science, INFORMS, vol. 46(10), pages 1269-1284, October.
    9. Todd R. Zenger, 1994. "Explaining Organizational Diseconomies of Scale in R&D: Agency Problems and the Allocation of Engineering Talent, Ideas, and Effort by Firm Size," Management Science, INFORMS, vol. 40(6), pages 708-729, June.
    10. Ashish Arora & Alfonso Gambardella & Laura Magazzini & Fabio Pammolli, 2009. "A Breath of Fresh Air? Firm Type, Scale, Scope, and Selection Effects in Drug Development," Management Science, INFORMS, vol. 55(10), pages 1638-1653, October.
    11. Yiannaka, Amalia & Fulton, Murray, 2006. "Strategic patent breadth and entry deterrence with drastic product innovations," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 177-202, January.
    12. Tatiana Plotnikova, 2010. "Success in Pharmaceutical Research: The Changing Role of Scale and Scope Economies, Spillovers and Competition," Jena Economic Research Papers 2010-045, Friedrich-Schiller-University Jena.
    13. Spyros Arvanitis & Nora Sydow & Martin Woerter, 2008. "Is there any Impact of University–Industry Knowledge Transfer on Innovation and Productivity? An Empirical Analysis Based on Swiss Firm Data," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 32(2), pages 77-94, March.
    14. Miotti, Luis & Sachwald, Frederique, 2003. "Co-operative R&D: why and with whom?: An integrated framework of analysis," Research Policy, Elsevier, vol. 32(8), pages 1481-1499, September.
    15. Breschi, Stefano & Lissoni, Francesco & Malerba, Franco, 2003. "Knowledge-relatedness in firm technological diversification," Research Policy, Elsevier, vol. 32(1), pages 69-87, January.
    16. Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
    17. Cameron, A Colin & Trivedi, Pravin K, 1986. "Econometric Models Based on Count Data: Comparisons and Applications of Some Estimators and Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(1), pages 29-53, January.
    18. Uwe Cantner & Tatiana Plotnikova, 2009. "Technological Diversity and Future Product Diversity in the Drug Industry," Jena Economic Research Papers 2009-031, Friedrich-Schiller-University Jena.
    19. Lionel Nesta & Pier Paolo Saviotti, 2005. "COHERENCE OF THE KNOWLEDGE BASE AND THE FIRM'S INNOVATIVE PERFORMANCE: EVIDENCE FROM THE U.S. PHARMACEUTICAL INDUSTRY -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 53(1), pages 123-142, March.
    20. Hyukjoon Kim & Hyojeong Lim & Yongtae Park, 2009. "How should firms carry out technological diversification to improve their performance? An analysis of patenting of Korean firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(8), pages 757-770.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Patent applications; Innovative sales share; New products; Improved products; Technological diversity;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kof:wpskof:13-336. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/koethch.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.