Balancing patent portfolios and R&D efforts: examining firm performance
ISSN: 0025-1747
Article publication date: 13 February 2023
Issue publication date: 25 April 2023
Abstract
Purpose
This study aims to ascertain whether technological diversification (TD) enhances firm performance and explores the effect of patent portfolio balancing (PPB) on firm financial performance and the moderating role of research and development (R&D) intensity.
Design/methodology/approach
This study empirically investigates a panel dataset based on 296 information and communications technology (ICT) small and medium-sized enterprises (SMEs) over 5 years, using a fixed-effects panel regression with time-lagged and moderating effects. Data are collected from a government survey and a firm and patent database.
Findings
The relationship between PPB and return on assets (ROA) is negative, indicating that TD in SMEs adversely affects firm performance. R&D intensity positively moderates the relationship between PPB and ROA, implying that follow-up R&D after creating new patents could weaken the negative relationship between TD and firm performance. This moderating effect only occurs when R&D intensity is sufficiently high, suggesting that high R&D firms could be more successful at diversification.
Practical implications
As TD consumes many resources, managers should set the optimal level of diversification and recognise the need for follow-up R&D for successful diversification.
Originality/value
This study conceptualises a unique theoretical framework for the PPB of ICT SMEs, revealing the moderating role of R&D intensity in changing the negative influence of PPB on firm performance.
Keywords
Acknowledgements
This research was supported by the R&D program of the Korea Institute of Energy Research (KIER) (C3-2447).
Citation
Kim, Z., Lee, D.H., Choi, K.-S. and Kwon, O. (2023), "Balancing patent portfolios and R&D efforts: examining firm performance", Management Decision, Vol. 61 No. 5, pp. 1113-1131. https://doi.org/10.1108/MD-03-2022-0400
Publisher
:Emerald Publishing Limited
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