Patently Wrong? Firm Strategy and the Decision to Disband Technological Assets

16 Pages Posted: 23 Jul 2015

See all articles by Robert A. Lowe

Robert A. Lowe

Wellspring Worldwide

Francisco M. Veloso

Carnegie Mellon University - Engineering and Public Policy (EPP); CATOLICA - LISBON School of Business and Economics

Date Written: Summer 2015

Abstract

Considerable research in strategy and innovation has been devoted to examining when and how firms accumulate resources. Yet, little empirical work has focused on when firms disband resources and how this decision to disband resources is affected by firm strategy. This oversight is surprising since theoretical work has highlighted the importance of knowing which assets to grow and which assets to trim. This paper shows that firms' decisions to disband assets are significantly influenced by earlier strategic choices, and the effects are distributed non‐uniformly across firms in the industry. We study these issues by examining how the R&D strategy that a pharmaceutical firm chooses – exploratory versus exploitative – influences the likelihood that firms disband their patents: specifically, decide not to renew the patent and allow the intellectual property right to expire before the end of the patent term.

Keywords: R&D strategy, exploration and exploitation, resource based view, asset disbandment, patent renewal, pharmaceuticals

Suggested Citation

Lowe, Robert A. and Veloso, Francisco M., Patently Wrong? Firm Strategy and the Decision to Disband Technological Assets (Summer 2015). European Management Review, Vol. 12, Issue 2, pp. 83-98, 2015, Available at SSRN: https://ssrn.com/abstract=2634747 or http://dx.doi.org/10.1111/emre.12044

Robert A. Lowe (Contact Author)

Wellspring Worldwide ( email )

350 N LaSalle Drive
Suite 1200
Chicago, IL 60654
United States

Francisco M. Veloso

Carnegie Mellon University - Engineering and Public Policy (EPP) ( email )

Pittsburgh, PA 15213
United States

HOME PAGE: http://www.andrew.cmu.edu/~fveloso/

CATOLICA - LISBON School of Business and Economics ( email )

Palma de Cima
Lisboa, 1649-023
Portugal

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