TY - CHAP AB - Purpose – Recent research suggests that the positive effect of knowledge diversification on the value of corporate knowledge is limited.Design/methodology/approach – This study uses an information processing perspective to explore the highest value that firms can draw from knowledge diversification and to argue that R&D cooperation and foreign direct investment help develop this value.Findings: Regressions on a sample of 21.434 patents of German manufacturing firms show that technologically diversified knowledge has an inverted U-shaped influence on the value of technological knowledge. The findings also suggest that R&D cooperation increases the value generated by technologically diversified knowledge. However, foreign direct investment does not seem to have a moderating influence on the relationship between technological diversification and value.Research limitations – We use patent citations to measure knowledge transfers. However, not all inventions are patented.Originality/value – The information processing theory, which we apply in this chapter, provides consistent explanations for both the inverted U-shape of diversification and the extension of the optimal diversification of knowledge by R&D cooperation. VL - 6 SN - 978-1-78052-115-2, 978-1-78052-114-5/1745-8862 DO - 10.1108/S1745-8862(2011)0000006015 UR - https://doi.org/10.1108/S1745-8862(2011)0000006015 AU - Hendrik Fisch Jan AU - Kertels Katharina ED - Alain Verbeke ED - Ana Teresa Tavares-Lehmann ED - Rob Van Tulder PY - 2011 Y1 - 2011/01/01 TI - Chapter 12 Increasing the Diversification of Technological Knowledge Through R&D Partnerships and Foreign Subsidiaries T2 - Entrepreneurship in the Global Firm T3 - Progress in International Business Research PB - Emerald Group Publishing Limited SP - 275 EP - 290 Y2 - 2024/03/29 ER -