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 journalArticle

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 languageEnglish
Pages (from-to)1070-1083
Number of pages14
JournalTechnology Analysis and Strategic Management
Volume30
Issue number9
DOIs
Publication statusPublished - 2018 Sep 2

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Patents
Organizational form
Diversification
Announcement
Innovation
Economic impact
Industry
Value creation
Wealth
Diversified firms
Market reaction
Organizational structure
Corporate diversification
Operating performance

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research

Cite this

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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 journalArticle

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