Technology Conglomeration, Strategic Alliances, and Corporate Innovation

Kai Li (), Jiaping Qiu () and Jin Wang ()
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Jiaping Qiu: DeGroote School of Business, McMaster University, Hamilton, Ontario L8S 4M4, Canada
Jin Wang: Lazaridis School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario N2L 3C5, Canada

Management Science, 2019, vol. 65, issue 11, 5065-5090

Abstract: We examine the organizational choice and innovative activity of technology conglomerates—firms that explore different technology fields with heated inventive activity. We develop a measure of firm-to-economy technological proximity to capture the extent of a firm’s technology conglomeration. We show that technology conglomerates are more likely to form alliances and that these alliances lead to higher patent output. In terms of underlying mechanisms, we show that after alliance formation, there are significant knowledge pooling and cross-fertilization between technology conglomerates and their alliance partners. Moreover, technology conglomerates produce more patents that are novel and/or with greater impact. Our findings suggest that both synergy and tolerance for failure are important motives for technology conglomerates to use alliances to accelerate corporate innovation.

Keywords: firm-to-economy technological proximity; technology conglomeration; innovation; synergy; strategic alliances; knowledge pooling; cross-fertilization; tolerance for failure (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:65:y:2019:i:11:p:5065-5090

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