Technological activities and their impact on the financial performance of the firm: Exploitation and exploration within and between firms
R. Belderbos, D. Faems, B. Leten & B. van Looy

This paper analyzes the consequences for financial performance of
technology strategies categorized along two dimensions: (1) explorative
versus exploitative and (2) solitary versus collaborative. The financial
performance implications of firms’ positioning along these two
dimensions has important managerial implications, but has received only
limited attention in prior studies. Drawing on organizational learning
theory and technology alliances literature, a set of hypotheses on the
performance implications of firms’ technology strategies are derived.
These hypotheses are tested empirically on a panel dataset (1996-2003)
of 168 R&D-intensive firms based in Japan, the US and Europe and
situated in five different industries (chemicals, pharmaceuticals, ICT,
electronics, non-electrical machinery). Patent data are used to
construct indicators of explorative versus exploitative technological
activities (activities in new or existing technology domains) and
collaborative versus solitary technological activities (joint versus
single patent ownership). The financial performance of firms is measured
via a market value indicator: Tobin’s Q index.

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