4.4 Article

Converting inventions into breakthrough innovations: The role of exploitation and alliance network knowledge heterogeneity

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ELSEVIER
DOI: 10.1016/j.jengtecman.2016.03.002

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Exploration; Exploitation; Invention; Innovation; Network

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We investigate how firms' exploratory and exploitative invention can lead to breakthrough innovations, and how heterogeneous knowledge available to firms through their R&D alliance network moderates this relationship. Using panel data of U.S. biopharmaceutical firms, we find that emphasis on exploitative invention has a stronger positive effect on breakthrough innovation than does a firm's emphasis on exploratory invention. Furthermore, heterogeneous knowledge available in firms' R&D alliance network increases the number of breakthrough innovations, up to a point, and then it begins to exert a negative effect. Interestingly, engaging alliance partners with heterogeneous knowledge strengthens the positive effect of exploitative invention on a firm's production of breakthrough innovations. (C) 2016 Elsevier B.V. All rights reserved.

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