Innovation Strategy of Private Firms

Abstract

We compare innovation strategies of public and private firms based on a large sample over the period 1997–2008. We find that public firms’ patents rely more on existing knowledge, are more exploitative, and are less likely in new technology classes, while private firms’ patents are broader in scope and more exploratory. We investigate whether these strategies are due to differences in firm information environments, CEO risk preferences, firm life cycles, corporate acquisition policies, or investment horizons between these two groups of firms. Our evidence suggests that the shorter investment horizon associated with public equity markets is a key explanatory factor.

Fit between Organizational Culture and Innovation Strategy: Implications for Innovation Performance

“…Innovation strategy refers to how firms turn to new product or technology development to survive rapid market changes [14]. In the current market, organizations normally face the challenge of reconciling various resource requirements to respond to market changes and competition [15].…”

“…An innovation strategy could help the organization determine the configuration of existing resources, products, processes, and systems to adapt to the market. Meanwhile, it guides the organization in making appropriate decisions on which work and functions should be made in the future market [14].…”

The Real Effects of Real Earnings Management: Evidence from Innovation

“…() and Gao et al. (). We employ an automated name‐matching algorithm that matches the name and location of each patent assignee that appears in patents granted in 2011–2014 in the Google Patent database to a pool of names and locations that have appeared as assignees of patents listed in our merged database from 1976 to 2010.…”

“…The combined database includes detailed patent information for patents granted by the USPTO from 1976 to 2010. We then extend the database to all patents granted to 2014 using the Google Patent database in Chen et al (2016) and Gao et al (2017). We employ an automated name-matching algorithm that matches the name and location of each patent assignee that appears in patents granted in 2011-2014 in the Google Patent database to a pool of names and locations that have appeared as assignees of patents listed in our merged database from 1976 to 2010.…”

The catalytic effect of internationalization on innovation

“…To further strengthen our results, we follow previous studies (e.g., Balsmeier, Fleming, & Manso, 2017;Gao, Hsu, & Li, 2018) to construct a New-class variable as the number of patents filed in technology classes to which a firm has no related patent traced to year 1976, divided by the number of patents applied in the same year. This measure helps to characterize firms' R&D activities in unfamiliar technological fields.…”