Organizational form and the economic impacts on innovation: The case of patent grants announcements
Journal
Academy of Management Annual Meeting Proceedings
ISSN
00650668
Date Issued
2006-12
Author(s)
Abstract
Although the values of innovations greatly differ, prior studies on diversification and innovation focused only on the quantity of inventive outputs without considering the economic impacts on shareholders value. This study investigates the influence of corporate diversification on the wealth effect of patent grants announcements. We find that focused firms experience significantly greater market reactions to patent announcements than diversified firms. In addition, we find that diversification into related industries has little effect on the wealth gains of granted patents, but diversification into unrelated industries significantly damages the economic impacts of patents. Those findings are robust to different definitions of industry relatedness, and remain unchanged even after controlling other determinants.
Event(s)
Academy of Management Annual Meeting Proceedings
Subjects
Diversification
Patent
Stock market
Publisher
Academy of Management
Description
66th Annual Meeting of the Academy of Management, AOM 2006, 11 August 2006 through 16 August 2006.
Academy of Management 2006 Annual Meeting: Knowledge, Action and the Public Concern, AOM 2006.
Academy of Management 2006 Annual Meeting: Knowledge, Action and the Public Concern, AOM 2006.
Type
conference paper