Business cycles modify firms’ incentives to innovate and the direction of innovation. By introducing a new measure of patent unconventionality this paper explores the impact of the business cycle on firms’ technological search strategies. We find that during upturns firms generate inventions characterized by a higher level of technological unconventionality. We also find that financially resilient and diversified firms produce more unconventional patents. While patent unconventionality is associated with technological impact and market value, firms extract more value by investing in unconventional inventions in downturns.

Sailing in all winds: technological search over the business cycle

Riccaboni, Massimo;
2018-01-01

Abstract

Business cycles modify firms’ incentives to innovate and the direction of innovation. By introducing a new measure of patent unconventionality this paper explores the impact of the business cycle on firms’ technological search strategies. We find that during upturns firms generate inventions characterized by a higher level of technological unconventionality. We also find that financially resilient and diversified firms produce more unconventional patents. While patent unconventionality is associated with technological impact and market value, firms extract more value by investing in unconventional inventions in downturns.
2018
Business cycle; Innovation; Patent indicators; Technological change; Strategy and Management1409 Tourism, Leisure and Hospitality Management; Management Science and Operations Research; Management of Technology and Innovation
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/20.500.11771/11001
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