Exploration and firms’ innovative performance – How does this relationship work?

Frederico G. P. Moreira, Ana Lúcia V. Torkomian, Thiago J. C. C. Soares

Abstract


Purpose – The main purpose of this paper is to analyze (1) the
relationship between a firm’s exploration strategy and its innovative
performance, and (2) whether its absorptive capacity (AC) moderates
this relationship.


Design/methodology/approach – We adopted an econometric
approach, using secondary data. We synchronized two databases –
Compustat and USPTO –, from which we extracted common data
concerning 275 biopharmaceutical firms for the period between 1990
and 2003. We used negative binomial regression to analyze data.


Findings – The exploration strategy positively influences firms’
innovative performance. However, excessive emphasis on this strategy
can diminish its benefits. Moreover, a firm’s AC will not positively
moderate the curvilinear relationship between exploration and the firm’s
innovative performance in all contexts, contradicting our theoretical
predictions. This is due to the existence of trade-offs between AC
characteristics and other organizational factors.


Originality/value – This paper extends the understanding of Open
Innovation and AC theories. Our results suggest that AC cannot be
understood as a one-dimensional and autonomous capacity located
exclusively in R&D departments. Aspects such as financial power, the
business model and the different dimensions of AC and their respective
locations in the firm’s value chain should be considered whenever the
influence of AC on exploration strategies is analyzed.


Keywords


Exploration; Innovative performance; Patents; Absorptive capacity.



DOI: https://doi.org/10.7819/rbgn.v18i61.2635

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