Paradigm-Changing vs. Paradigm-Deepening Innovation: How Firm Scope Influences Firm Technological Response to Shocks

Gautam Ahuja (), Curba Morris Lampert () and Vivek Tandon ()
Additional contact information
Gautam Ahuja: Stephen M. Ross School of Business, University of Michigan, Ann Arbor, Michigan 48109
Curba Morris Lampert: College of Business, Florida International University, Miami, Florida 33199
Vivek Tandon: NUS Business School, National University of Singapore, Singapore 119245

Organization Science, 2014, vol. 25, issue 3, 653-669

Abstract: We examine the direction of firms’ research efforts as they respond to the shock of a sharp increase in the price of a key input. In terms of direction, firms can respond to this shock with paradigm-changing investments that develop technologies to use substitute inputs or with paradigm-deepening investments that develop technologies to improve the utilization efficiency of the existing input. We develop a framework that suggests that firms’ emphasis on paradigm-changing versus paradigm-deepening investments depends on the degree of input-relatedness across their businesses. We test our hypotheses by examining the responses of large manufacturing firms in the United States to the oil shock of the early 1980s. Our framework predicts and our results show that the more related a firm’s businesses are, the larger its investments into paradigm-changing technologies are and the smaller its investments into paradigm-deepening technologies in response to the oil shock are. We identify the implications of these findings for technological evolution and diversification literatures.

Keywords: technological change; innovation; evolutionary approaches; shocks (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://dx.doi.org/10.1287/orsc.2013.0867 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:25:y:2014:i:3:p:653-669

Access Statistics for this article

More articles in Organization Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().