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Managing portfolio risk in strategic technology management : evidence from a panel data-set of the world's largest R&D performers

Neuhäusler, Peter; Schubert, Torben LU ; Frietsch, Rainer and Blind, Knut (2015) In Economics of Innovation and New Technology p.1-17
Abstract

In this article, we analyze the impact of firms’ technology bases on their financial performance. By taking a strategic perspective of technology, we argue that it is not sufficient to analyze only the size or novelty/quality of the technology base as technology bases can best be understood as portfolios of individual technologies. In such a framework, risk consideration should be taken into account. More specifically, we argue that increasing technological breadth can serve as a hedge against the inherent uncertainties of developing and commercializing technology, in particular when the technology base is very large or novel. We also propose that technology has higher impacts on financial performance for firms with broader technology... (More)

In this article, we analyze the impact of firms’ technology bases on their financial performance. By taking a strategic perspective of technology, we argue that it is not sufficient to analyze only the size or novelty/quality of the technology base as technology bases can best be understood as portfolios of individual technologies. In such a framework, risk consideration should be taken into account. More specifically, we argue that increasing technological breadth can serve as a hedge against the inherent uncertainties of developing and commercializing technology, in particular when the technology base is very large or novel. We also propose that technology has higher impacts on financial performance for firms with broader technology portfolios. A similar argument proposes that technological breadth can offset the increased risks of addressing foreign markets. We test our hypotheses using an international panel data-set of large R&D-performing firms. Our results suggest that broad technology portfolios can indeed serve as a hedge against technological and commercialization risks.

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author
publishing date
type
Contribution to journal
publication status
in press
subject
keywords
financial performance, firms, Patents, technology base
in
Economics of Innovation and New Technology
pages
17 pages
publisher
Taylor & Francis
external identifiers
  • Scopus:84947744415
ISSN
1043-8599
DOI
10.1080/10438599.2015.1109780
language
English
LU publication?
no
id
b9d550ef-dce9-4ee9-9376-b93ee7e041c1
date added to LUP
2016-05-18 13:27:03
date last changed
2016-07-07 13:18:23
@misc{b9d550ef-dce9-4ee9-9376-b93ee7e041c1,
  abstract     = {<p>In this article, we analyze the impact of firms’ technology bases on their financial performance. By taking a strategic perspective of technology, we argue that it is not sufficient to analyze only the size or novelty/quality of the technology base as technology bases can best be understood as portfolios of individual technologies. In such a framework, risk consideration should be taken into account. More specifically, we argue that increasing technological breadth can serve as a hedge against the inherent uncertainties of developing and commercializing technology, in particular when the technology base is very large or novel. We also propose that technology has higher impacts on financial performance for firms with broader technology portfolios. A similar argument proposes that technological breadth can offset the increased risks of addressing foreign markets. We test our hypotheses using an international panel data-set of large R&amp;D-performing firms. Our results suggest that broad technology portfolios can indeed serve as a hedge against technological and commercialization risks.</p>},
  author       = {Neuhäusler, Peter and Schubert, Torben and Frietsch, Rainer and Blind, Knut},
  issn         = {1043-8599},
  keyword      = {financial performance,firms,Patents,technology base},
  language     = {eng},
  month        = {11},
  pages        = {1--17},
  publisher    = {ARRAY(0xb63f300)},
  series       = {Economics of Innovation and New Technology},
  title        = {Managing portfolio risk in strategic technology management : evidence from a panel data-set of the world's largest R&D performers},
  url          = {http://dx.doi.org/10.1080/10438599.2015.1109780},
  year         = {2015},
}