Abstract
This study investigates the impact of corporate diversification on the value creation of patent grants. We find that focussed firms experience significantly greater market reactions to patent announcements than diversified firms. Diversification into related industries has little effect on the wealth gains of granted patents, while diversification into unrelated industries significantly reduces the wealth gains. We further find that post-announcement operating performance is significantly associated with the degree of diversification. Overall, our findings suggest that the selection of diversification as a firm's organisational structure has a negative influence on the value creation of innovation, and this influence is exacerbated when this diversification involves unrelated industries.
| Original language | English |
|---|---|
| Pages (from-to) | 1070-1083 |
| Number of pages | 14 |
| Journal | Technology Analysis and Strategic Management |
| Volume | 30 |
| Issue number | 9 |
| DOIs | |
| Publication status | Published - 2018 Sep 2 |
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All Science Journal Classification (ASJC) codes
- Strategy and Management
- Management Science and Operations Research
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Organisational form and the economic impacts of innovation : the case of patent grant announcements. / Chen, Li Yu; Lai, Jung Ho; Chang, Shao-Chi; Hung, Yu Shun.
In: Technology Analysis and Strategic Management, Vol. 30, No. 9, 02.09.2018, p. 1070-1083.Research output: Contribution to journal › Article
TY - JOUR
T1 - Organisational form and the economic impacts of innovation
T2 - the case of patent grant announcements
AU - Chen, Li Yu
AU - Lai, Jung Ho
AU - Chang, Shao-Chi
AU - Hung, Yu Shun
PY - 2018/9/2
Y1 - 2018/9/2
N2 - This study investigates the impact of corporate diversification on the value creation of patent grants. We find that focussed firms experience significantly greater market reactions to patent announcements than diversified firms. Diversification into related industries has little effect on the wealth gains of granted patents, while diversification into unrelated industries significantly reduces the wealth gains. We further find that post-announcement operating performance is significantly associated with the degree of diversification. Overall, our findings suggest that the selection of diversification as a firm's organisational structure has a negative influence on the value creation of innovation, and this influence is exacerbated when this diversification involves unrelated industries.
AB - This study investigates the impact of corporate diversification on the value creation of patent grants. We find that focussed firms experience significantly greater market reactions to patent announcements than diversified firms. Diversification into related industries has little effect on the wealth gains of granted patents, while diversification into unrelated industries significantly reduces the wealth gains. We further find that post-announcement operating performance is significantly associated with the degree of diversification. Overall, our findings suggest that the selection of diversification as a firm's organisational structure has a negative influence on the value creation of innovation, and this influence is exacerbated when this diversification involves unrelated industries.
UR - http://www.scopus.com/inward/record.url?scp=85042937588&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85042937588&partnerID=8YFLogxK
U2 - 10.1080/09537325.2018.1441396
DO - 10.1080/09537325.2018.1441396
M3 - Article
AN - SCOPUS:85042937588
VL - 30
SP - 1070
EP - 1083
JO - Technology Analysis and Strategic Management
JF - Technology Analysis and Strategic Management
SN - 0953-7325
IS - 9
ER -