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

Rene Belderbos, Dries Faems (), Bart Leten () and Bart Van Looy ()
Additional contact information
Dries Faems: KU Leuven
Bart Leten: KU Leuven
Bart Van Looy: KU Leuven

No 2009-067, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper analyzes the consequences for financial performance of technology strategies categorized along two dimensions: (1) explorative versus exploitative and (2) solitary versus collaborative. The financial performance implications of firms’ positioning along these two dimensions has important managerial implications, but has received only limited attention in prior studies. Drawing on organizational learning theory and technology alliances literature, a set of hypotheses on the performance implications of firms’ technology strategies are derived. These hypotheses are tested empirically on a panel dataset (1996-2003) of 168 R&D-intensive firms based in Japan, the US and Europe and situated in five different industries (chemicals, pharmaceuticals, ICT, electronics, non-electrical machinery). Patent data are used to construct indicators of explorative versus exploitative technological activities (activities in new or existing technology domains) and collaborative versus solitary technological activities (joint versus single patent ownership). The financial performance of firms is measured via a market value indicator: Tobin’s Q index.

Keywords: Innovation; Tobin’s q; R&D collaboration; exploration & exploitation (search for similar items in EconPapers)
JEL-codes: O31 O32 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:unm:unumer:2009067

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