How should firms carry out technological diversification to improve their performance? An analysis of patenting of Korean firms

This research aims to analyze how a firm's technological diversification strategies influence its financial performances, in terms of ‘technological diversification’ in broad technology sectors and ‘technological concentration’ on its own core technology, especially in the case of Korean large firms. The data used in the analysis were panel data encompassing the years between 1990 and 2006, which linked Korean firms’ patent information registered in the United States Patent and Trademark Office to the financial data of those firms collected from Korea Investors Service, Inc. (Kis-Value). For the estimation of the panel data, a fixed effect model, which considers the individual firms’ own effect on the financial performance, was used. Tobin's q was used as a dependent variable representing firm performance, while ‘broad technology diversity’ and ‘core technology diversity’ were used as the focal explanatory variables. The results show that a firm seeking to have more technological assets should invest in a broad technological diversification strategy in its search for new business opportunities; it should likewise concentrate on the core technology in order to maintain its financial performance.     

Discontinuities in genetic engineering for pharmaceuticals? firms jumps and lock-in in systems of Innovation

This pape criticizes the concept of 'technological discontinuities'. It argues that the concept is misleading when the skills and knowledge of an indusry are composed of multiple rather than single core technologies. In cases such as the use of genetic engineering as the basis of production in pharmaceuticals, both existing pharmaceutical firms and new biotech firms integrate the new techniques into existing indusrial practice. The radical tecnology both enhances and destroys existing knowledge; the key to survival has been integration. Both existing and new firms have had the possibility of integrating multiple core technologies, but firms have been able to do so in different ways. Some existing firms could jump over to the radically new ‘technological trajectory’, by combining their creation of new competencies through in-house R&D with their access to novelty through relations with external agents in systems of innovation.     

Is newest always best? Firm-level evidence to challenge a focus on high-capability technological (product or process) innovation

This paper sets out to address a gap in the empirical literature on the importance of ‘low-capability’ innovation for firms. The study is framed around discussion of the conceptual bias that remains in policy and academic literature towards a narrow subset of technological (product or process) innovation labelled ‘high-capability’ innovation in this paper. The paper argues that this bias influences the public and business community's understanding of the term ‘innovation’ and has implications for innovation measurement, research, policy and strategy. The study uses data from an economy-wide, regional innovation survey based on the Oslo manual, and includes 648 innovative firms covering all industry sectors. The paper combines elements of both subject and object approaches to innovation measurement, using data from an open-ended survey question to explore the alignment between what firms report as their ‘most important innovation’ (MII) and firm capabilities for introducing ‘high-capability’ technological innovation. Results show that a substantial share of firms report an MII that is a ‘low-capability’ innovation, including those firms with high R&D intensity, those with novel technological innovation, and firms in more innovative sectors of manufacturing and knowledge intensive business services. The paper discusses the implications of this result for future innovation measurement and research.     

Gulf Cooperation Council Oil Exporters and the Future of the Dollar

How has industrial restructuring and technological upgrading in South Korea undertaken in the post-crisis era impacted on the state's capacity to guide strategic industry development? The latest reincarnation of the ‘end of the developmental state’ thesis proposes that industry policies are losing their strategic long-term oriented character due to the state's lack of legitimacy to play a guiding role after the economic recovery. I test this view in light of the Korean state's role, since the early 2000s, in the promotion of a new mobile communications software standard known as the Wireless Internet Platform for Interoperability (WIPI). I argue that the Korean state retains a strategic long-term approach to techno-industrial governance. The argument is developed through examining how bureaucratic actors gained the legitimacy to challenge Qualcomm, the strategy involved in promoting WIPI, and how the bureaucracy supported domestic firms under an increasingly open international trading environment. The findings reveal the state's ability to renew its legitimacy to play a developmental role through re-articulating policy goals from catching-up to nurturing innovation. Furthermore, the state has experimented with new forms of cooperation between government and business to nurture the growth of new infant technological growth sectors such as telecommunications.     

Licensing technology to shape standards: Examining the influence of the industry context

Technology standards refer to particular technological solutions, which emerge as the accepted approach to fulfill a particular function. In light of the growing importance of technology standards and network externalities, industrial firms may not only adopt emerging standards, but they can actively shape the standardization processes based on their forecasting activities. One important means to influence standard setting towards a firm's own technology is to foster the technology's adoption by actively licensing it to other organizations. Thus, industrial firms may license technology in order to enhance their future new product performance based on a standard related to their technology. To shed light on these dynamics of standardization processes, we draw on contingency theory and conceptually examine the role of licensing in the emergence of technology standards. We further use new data from two surveys of 79 industrial firms with a three-year lag to analyze how environmental contingency factors related to appropriability, i.e., patent protection and technological turbulence, moderate the relationship between licensing to shape technology standards and a firm's subsequent innovation performance. The data provide strong support for the importance of shaping standards by licensing technology, and the findings have important implications for research into standards, licensing, and appropriability.     

THE EFFECTS OF TECHNOLOGICAL CHANGE ON THE QUALITY AND VARIETY OF INFORMATION PRODUCTS†

Anecdotal evidence suggests that producers of information products (TV programs, movies, computer software) may respond to potentially cost-saving technological change by increasing, rather than reducing, their total production investments in the ‘first copy’ of each product, possibly at the expense of product variety. Comparative statics show that under reasonable assumptions about consumer demand and production technology, competitive firms in a monopolistically competitive industry are in fact induced to increase first-copy investments as a result of either what we define as ‘quality-enhancing’ or ‘cost-reducing’ types of technological advance, whereas product variety either falls or stays the same. Results suggest that contrary to often held expectations, potentially cost-saving technological advances in information industries may result in greater market concentration.     

Technology flows between sectors and their impact on large-scale firms

In this article we highlight the importance of technology flows between sectors and their impact on the labour productivity of large-scale corporations. Based on theoretical considerations, we explore technological spillovers between the sectors of an economy. Large-scale corporations usually focus on certain sectors but make use of a wide range of technological knowledge from other sectors. Thereby, technological knowledge built up in sectors by continuous R&D activities does not spill over without bounds but is directed by firms’ absorptive capacities. We use firms’ patent portfolio to empirically calculate the sector affiliation and therewith the firms’ absorptive capacities in order to estimate the impact of technology diffusion on labour productivity. Fortune 500 firms serve as data base.     

Do firms with larger patent portfolios create more new plant varieties in the US agricultural biotechnology industry?

This article is an empirical analysis of the relationship between patent ownership and variety innovation for US agricultural biotechnology firms in the years 1976–1999. Counts of new varieties include corn, soybean, or wheat varieties protected by either patents or plant variety protection certificates, while patent portfolio size is defined as the count of a firm's gene and method patents. Negative binomial regression results indicate that firms with larger patent portfolios did not exhibit scale economies in variety creation nor did firms with wider technological diversity in their patent portfolios create significantly greater numbers of new varieties. However, firms experienced positive spillover effects from rival firms’ patent ownership, and patent ownership increases this effect. Sample firms that have merged in the past do not produce significantly greater numbers of new varieties after considering an increase in portfolio size and did not experience greater economies of scale in creating new varieties compared with firms that experienced no past mergers.     

An integrated indicator system for patent portfolios: evidence from the telecommunication manufacturing industry

Against the background of ‘patent portfolio races’ in industries such as telecommunications, this paper proposes a set of patent portfolio indicators to measure patents’ scale and diversity. This indicator system is used in a time series to analyse the patenting activity and technology strategy of the world’s top 20 firms in the telecommunication manufacturing industry, based on a large data set from United States Patent and Trade Office. In combination with composite and relative measures, we identify the firms’ comparative positions in patenting activity. The paper adds to the ongoing discussion about, and enriches the theory of, patent portfolios.     

Impact of different patent cooperation network models on innovation performance of technology-based SMEs

ABSTRACT

Patent cooperation network, an important way for technology-based SMEs to enhance innovation performance, has become a research hotspot in recent years. Different types of patent cooperation network models and different degree of SMEs embedding them will lead to different effects on enterprise innovation performance improvement. This research selected the ICT industry and the pharmaceutical industry technology-based SMEs with rich patent output as research objects. Based on binary structure perspective of network breadth and depth, the patent cooperation networks are divided into four types: ‘strong exploration’, ‘weak exploration’, ‘strong utilisation’ and ‘weak utilisation’. Through the multi-selection model and the negative binomial regression model, the general factors in the selection of patent cooperation network models and the impact of different models on enterprise innovation performance are analysed. This research provides path breakthroughs and development proposals for technology-based SMEs to access innovative resources and enhance their innovation capabilities on patent cooperation networks.     

人工智能对制造企业是否存在“生产率悖论”

在新一轮科技变革和产业革命背景下,人工智能已深度融入国民经济各产业,成为产业发展的重要驱动力。人工智能能否促进制造企业生产率提升,已成为新时代中国制造业高质量发展的关键。利用2015—2017年中国A股制造业上市公司相关数据,实证检验人工智能对制造企业生产率的影响,构建基于结构方程的多重中介效应模型,分析制造企业应用人工智能技术影响生产率的内在机制及路径。研究发现,人工智能提升了制造企业生产率;市场份额对人工智能与制造企业生产率的关系有显著负向调节作用;人工智能通过劳动力数量、物质资本使用效率和技术创新产出3种中介变量显著促进企业生产率提升,并通过人力资本使用效率和技术创新投入抑制企业生产率提升。     

创新网络双重嵌入、网络耦合与产业升级：基于上市企业面板数据的实证分析

创新网络多元嵌入是企业网络能力形成和产业升级的重要驱动力。基于网络双重嵌入和网络耦合视角,选取2009-2020年291家中国平板显示产业上市公司作为研究样本,实证分析企业个体创新网络与股东关系网络双重嵌入及企业个体创新能力对产业升级的作用路径。结果表明,企业个体创新网络连通性与网络团体规模、股东关系网络密度及企业创新能力均正向影响产业升级,并且由于企业管理者与投资者间的创新决策冲突给产业升级带来负面影响,企业间网络连通性和企业个体研发投入在股东间过于紧密的关系影响下反而不利于产业升级。进一步研究表明,产业升级是综合企业个体创新、企业间创新合作和企业投资者合作等多个层次的多维度动态过程,降低数字创新不确定性和有效利用网络化创新合作机制将是产业数字创新的重要研究方向。     

How well do patent citations measure flows of technology? Evidence from French innovation surveys

Patent citation data are used in a growing body of economics and business research on technological diffusion. Until now, there exists little evidence on whether patent citations are a good measure of knowledge flows. Our paper assesses the legitimacy of using European patent citations as a measure of technology flows. It uses information from the Community Innovation Survey collected by the French Service des Statistiques Industrielles (SESSI), which contain firms’ responses to questions about their innovative activity. We show that patent citations are indeed related to firms’ statements about their acquisition and dispersion of new technology, but that the strength and statistical significance of this relationship varies across geographical regions and across channels of knowledge diffusion.     

R&D, patents and stock return volatility

Recent finance literature highlights the role of technological change in increasing firm specific (idiosyncratic) and aggregate stock return volatility, yet innovation data is not used in these analyses, leaving the direct relationship between innovation and stock return volatility untested. The paper investigates the relationship between volatility and innovation using firm level patent data. The analysis builds on the empirical work by Mazzucato (Rev Econ Dyn 5:318–345, 2002; J Evol Econ 13(5):491–512, 2003) where it is found that stock return volatility is highest during periods in the industry life-cycle when innovation is the most ‘radical’. In this paper we ask whether firms which invest more in innovation (more R&D and more patents) and/or which have more important innovations (patents with more citations) experience more volatility in their returns. Given that returns should in theory be higher, on average, for higher risk stocks, we also look at the effect of innovation on the level of returns. To take into account the competition between firms within industries, firm returns and volatility are measured relative to the industry average. We focus the analysis on firms in the pharmaceutical industry between 1974 and 1999. Results suggest that there is a positive and significant relationship between volatility, R&D intensity and the various patent related measures—especially when the innovation measures are filtered to distinguish the very innovative firms from the less innovate ones.     

The importance of government commitment in attracting firms: A dynamic analysis of tax competition in an agglomeration economy

Agglomeration tendencies of industrial firms significantly affect the nature of tax competition. This paper analyzes tax competition between two countries over an infinite time horizon in an economy with trade costs and internationally mobile industrial firms. Most of the previous studies on tax competition in the ‘new economic geography’ framework employ static models. In this study, two governments dynamically compete with each other to attract firms through their choices of taxes and subsidies. It is shown that the commitment of the governments to their policies is crucial in determining the distribution of firms in the long run. Specifically, if governments find each others׳ tax policies credible, then one country will attract all the firms when trade costs are low enough to make agglomeration forces dominant. If policies are not credible, both countries may attract an equal share of firms even when trade costs are low, as the lack of commitment by governments acts as a dispersion force.     

From Imitation to Innovation: The Evolution of R&D Capabilities and Learning Processes in the Indian Pharmaceutical Industry

Since the mid 1990s the Indian pharmaceutical industry has emerged as a leading supplier of generic drugs to both developing and developed countries.The movement of the Indian pharmaceutical industry along the R&D value chain represents a remarkable shift from an importer to an innovator of drugs. The Indian government's industrial and technology policies along with changes in regulation of intellectual property rights played a crucial role in shaping this development of R&D capability. Using the 'capability creation model' this paper discusses the learning processes and stages involved in this dramatic accumulation of technological capability. This analysis shows that the Indian pharmaceutical industry has followed a trajectory from duplicative imitation to creative imitation to move up the value chain of pharmaceutical R&D. Finally as a result of changes in patent law the industry is learning to develop capabilities in innovative R&D. The basic and intermediate technological capabilities gained from imitative learning gave these firms a solid base for development of competence in advanced innovative R&D. These findings have implications for government policies as well as firm strategies in other developing countries albeit with some limitations due to global harmonisation of patent laws being promoted by the World Trade Organization.     

Technological change and forms of innovation in consumer magazine publishing: a UK-based study

This paper presents the results of research undertaken between 2002 and 2004 into the impact of technological change on the UK consumer magazine industry. The findings highlight patterns of innovation, both in the range of products (most notably monthly magazine titles) and the structure of organisations and work practices, which have tended to elude much of the contemporary debate within the ‘cultural industries’ approach adopted in the media studies discipline. Instead, our analysis makes use of insights from the innovation literature to highlight the impact of technological discontinuities on the capabilities of both incumbent firms and new entrants. It also highlights the important and growing role that is being played in innovation-led industries through the adoption of organisational practices that find their origins in the traditions of project-based firms.     

International,intra-national and inter-firm knowledge diffusion and technological catch-up: the USA,Japan, Korea and Taiwan in the memory chip industry

Using data on US patent citations, this paper investigates the pattern of international, intranational and interfirm knowledge diffusion in the process of technological catch-up by Japanese, Korean and Taiwanese firms in the memory chip industry. First, regarding international diffusion, this paper finds that the ordering of citations is exactly the same as the order of entry into the industry: Taiwanese firms tend to cite Korean firms, Korean firms tend to cite Japanese firms and Japanese firms tend to cite US firms. Second, the degree of intranational knowledge diffusion is proportional to the level of technological capability or order of entry, although it is also affected by organisational differences among the firms. Third, the difference in patterns of interfirm knowledge reflects difference across organisations, such that big Korean group firms are less oriented toward interfirm knowledge diffusion compared with their Taiwanese small and medium enterprise (SME) counterparts. To explain such difference, the role of government research institutions has been highlighted, especially since the Industrial Technology Research Institute (ITRI) accounts for the lion's share of Taiwanese-held patents and in the spin-offs of many firms in the industry.     

Forecasting livestock prices with individual and composite methods

We investigate the incentives of private firms to adopt new technologies. Econometric investigation is performed on a pooled sample of individual US airline firms over the period 1971 to 1986 for which extensive information on available jet aircraft technology and fleet choice have been recorded. Given the incidence of successive commercial aircraft innovations and variation in production attributes across firms, we are able to consider a wider array of ‘time-dependent’ and ‘time-independent’ adoption influences than in previous firm-level studies. To the extent that our study provides useful general insights into adoption decisions by firms, the results have implications for US global competitiveness policy. One key finding is that firms subject to increased product market competition exhibit a higher propensity to adopt technological innovations.     

The determinants of firms’ global diversification decisions

Why do some firms choose to be ‘born global’ and become early internationalizing firms (EIFs) while others choose to be ‘born-again global’ and develop into late internationalizing firms (LIFs)? What are the main factors impacting a firm’s decision on the timing of global diversification? Based on the theories of diversification, this study examines the role of peer influence and desire for growth on the timing of a firm’s globalization decision. We further study the idiosyncratic risk and the adoption of technological innovation hypotheses on global diversification. Our results document that innovation efficiency strongly enhances EIFs’ propensity to global diversification. On the other hand, peer pressure and idiosyncratic risk level significantly influence EIFs not to globalize. In contrast, LIFs are positively influenced by their industry peers, showing how young and mature companies respond to the market competition in a different manner.