Organisational form and the economic impacts of innovation: the case of patent grant announcements

Li Yu Chen; Jung Ho Lai; Shao Chi Chang; Yu Shun Hung

doi:10.1080/09537325.2018.1441396

Organisational form and the economic impacts of innovation: the case of patent grant announcements

Li Yu Chen, Jung Ho Lai, Shao Chi Chang, Yu Shun Hung

Research output: Contribution to journal › Article

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	https://doi.org/10.1080/09537325.2018.1441396
Publication status	Published - 2018 Sep 2

All Science Journal Classification (ASJC) codes

Strategy and Management
Management Science and Operations Research

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Chen, L. Y., Lai, J. H., Chang, S. C., & Hung, Y. S. (2018). Organisational form and the economic impacts of innovation: the case of patent grant announcements. Technology Analysis and Strategic Management, 30(9), 1070-1083. https://doi.org/10.1080/09537325.2018.1441396

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