Technology Conglomeration, Strategic Alliances, and Corporate Innovation

73 Pages Posted: 16 Aug 2014 Last revised: 6 Mar 2018

See all articles by Kai Li

Kai Li

University of British Columbia (UBC) - Sauder School of Business; Asian Bureau of Finance and Economic Research (ABFER); China Academy of Financial Research (CAFR); European Corporate Governance Institute (ECGI)

Jiaping Qiu

McMaster University - Michael G. DeGroote School of Business

Jin Wang

Wilfrid Laurier University - Lazaridis School of Business & Economics

Date Written: March 5, 2018

Abstract

We examine the organizational choice and innovative activity of technology conglomerates—firms that explore different technology fields with heated inventive activity. We develop a measure of firm-to-economy technological proximity to capture the extent of a firm’s technology conglomeration. We show that technology conglomerates are more likely to form alliances and that these alliances lead to higher patent output. In terms of underlying mechanisms, we show that after alliance formation, there are significant knowledge pooling and cross-fertilization between technology conglomerates and their alliance partners. Moreover, technology conglomerates produce more patents that are novel and/or with greater impact. Our findings suggest that both synergy and tolerance for failure are important motives for technology conglomerates to use alliances to accelerate corporate innovation.

Keywords: firm-to-economy technological proximity, technology conglomeration, innovation, synergy, strategic alliances, knowledge pooling, cross-fertilization, tolerance for failure

JEL Classification: G34, O32

Suggested Citation

Li, Kai and Qiu, Jiaping and Wang, Jin, Technology Conglomeration, Strategic Alliances, and Corporate Innovation (March 5, 2018). Available at SSRN: https://ssrn.com/abstract=2480547 or http://dx.doi.org/10.2139/ssrn.2480547

Kai Li

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada
604-822-8353 (Phone)
604-822-4695 (Fax)

HOME PAGE: http://finance.sauder.ubc.ca/~kaili

Asian Bureau of Finance and Economic Research (ABFER) ( email )

BIZ 2 Storey 4, 04-05
1 Business Link
Singapore, 117592
Singapore

China Academy of Financial Research (CAFR)

1954 Huashan Road
Shanghai P.R.China, 200030
China

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Jiaping Qiu

McMaster University - Michael G. DeGroote School of Business ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

Jin Wang (Contact Author)

Wilfrid Laurier University - Lazaridis School of Business & Economics ( email )

Waterloo, Ontario N2L 3C5
Canada

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
492
Abstract Views
3,847
rank
69,197
PlumX Metrics