Technological acitivities and their impact on the financial performance of firms: Exploitation and exploration within and between firms

R.A. Belderbos, D. Faems, B. Leten, J. Looy

Research output: Contribution to journalArticleAcademicpeer-review

55 Citations (Scopus)

Abstract

The present study analyzes the impact of firms' technological strategies on their financial performance. Technology strategies are defined by making a distinction between explorative and exploitative as well as collaborative and solitary technological activities. Several hypotheses are tested on a panel data set (1996-2003) of 168 research and development (R&D)-intensive firms based in Japan, the United States, and Europe and situated in five different industries (i.e., chemicals, pharmaceuticals, information and communication technologies [ICT], electronics, and nonelectrical machinery). This study's analyses confirm the existence of an inverted U-shape relationship between the share of explorative technological activities and financial performance. In addition, firms engaging more intensively in collaboration perform relatively stronger in explorative activities. At the same time, a negative relationship is observed between the share of collaborative technological activities and a firm's market value. This negative relationship is most pronounced in collaborative activities of an exploratory nature. Overall, these findings suggest that the value appropriation complexities of collaborative technological activities may offset their value-enhancing potential.

Original languageEnglish
Pages (from-to)869-882
Number of pages14
JournalJournal of Product Innovation Management
Volume27
Issue number6
DOIs
Publication statusPublished - Nov 2010

Keywords

  • RESEARCH-AND-DEVELOPMENT
  • INTERFIRM KNOWLEDGE TRANSFER
  • STRATEGIC ALLIANCES
  • PRODUCT DEVELOPMENT
  • MARKET VALUE
  • INTERORGANIZATIONAL COLLABORATION
  • MANUFACTURING FIRMS
  • PATENT STATISTICS
  • INNOVATION
  • AMBIDEXTERITY

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