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The differential effects of basic research on firm R&D productivity: The conditioning role of technological diversification

Jin-Uk Choi and Chang-Yang Lee

Technovation, 2022, vol. 118, issue C

Abstract: This study examines the relationship between basic research and firm R&D productivity. In particular, this study focuses on the conditioning role of firm-level technological diversification in the relationship based on the idea that firms with a broad technological knowledge base are better positioned to fully harness the wide and unpredictable applicability of scientific knowledge. Using a unique panel dataset of Korean manufacturing firms during the period of 2003–2012, we find the following. First, firm-level technological diversification positively conditions the relationship between basic research and firm R&D productivity. In particular, unrelated technological diversification, rather than related technological diversification, has a positive conditioning effect on the relationship. Second, the positive conditioning effect of technological diversification is more pronounced for firms operating in high-tech industries or in less competitive industries. These results suggest that a broad technological knowledge base across unrelated technological fields is helpful or necessary for firms to better utilize basic research for enhancing their R&D productivity.

Keywords: Firm R&D productivity; Basic research; Scientific knowledge; Technological diversification (search for similar items in EconPapers)
JEL-codes: O31 O32 O33 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.technovation.2022.102559

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