Organizational form and the economic impacts on innovation: The case of patent grants announcements

Shao Chi Chang, Sheng Syan Chen, Yu Shun Hung

Research output: Contribution to conferencePaperpeer-review

Abstract

Although the values of innovations greatly differ, prior studies on diversification and innovation focused only on the quantity of inventive outputs without considering the economic impacts on shareholders value. This study investigates the influence of corporate diversification on the wealth effect of patent grants announcements. We find that focused firms experience significantly greater market reactions to patent announcements than diversified firms. In addition, we find that diversification into related industries has little effect on the wealth gains of granted patents, but diversification into unrelated industries significantly damages the economic impacts of patents. Those findings are robust to different definitions of industry relatedness, and remain unchanged even after controlling other determinants.

Original languageEnglish
Publication statusPublished - 2006 Dec 1
Event66th Annual Meeting of the Academy of Management, AOM 2006 - Atlanta, GA, United States
Duration: 2006 Aug 112006 Aug 16

Other

Other66th Annual Meeting of the Academy of Management, AOM 2006
CountryUnited States
CityAtlanta, GA
Period06-08-1106-08-16

All Science Journal Classification (ASJC) codes

  • Management Information Systems
  • Management of Technology and Innovation

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