Exploring the determinants of technological follow-on in new technological areas

• Published in: 2007 IEEE International Engineering Management Conference pp. 292 - 297
• Main Authors: Hsueh-Liang Wu, Ming-Chao Huang
• Format: Conference Proceeding
• Language: English
• Published: IEEE 01.07.2007
• Subjects: Business; Disruptive and emerging technologies; Environmental management; Forecasting and technology prediction; History; Investments; Pharmaceutical technology; Product development; R&D Management; Research and development; Technological innovation; Technology forecasting; Uncertainty
• ISBN: 9781424421459; 1424421454
• ISSN: 2159-3590
• DOI: 10.1109/IEMC.2007.5235028

A creative idea or an invention per se is not associated with a real advantage, while follow-on patenting or product development activities are. Drawing on the real options reasoning, this paper aims to explore the nature of R&D investment decisions that drive a firm to deepen its foothold in a new technological area. Using Cox regression model upon the patent data of top bearing companies worldwide over the period 1990-2004, we identified the influences of technology-, firm- and market-related constructs, namely, age of knowledge searched, accumulated knowledge stock, and competitive effects, on the focal firm's follow-on patenting behavior. Our results highlight the critical role of organizational learning patterns in determining the incidence of innovation persistence, and suggest the context-dependent nature of such technological deepening behaviors. The empirical findings shed light on R&D investment strategies when firms are subject to the uncertainty of technological environments.