Internal and External Innovation: Antecedents, Moderators, and Consequences




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This dissertation endeavors to advance our understanding on firms’ internal and external innovation. The three essays focus on studying the antecedents, moderators, and performance consequences of firms’ innovation via internal (patenting) and external (alliance) modes. By leveraging signaling, dynamic capabilities, diversity, and regulatory focus mechanisms, this dissertation enriches theories in strategic management and behavioral economics.

Essay 1 focuses on consequences of firms’ internal innovation as reflected by firms’ patenting. Specifically, I investigate the influence that firms’ patenting patterns (trajectory and velocity) have on firms’ evaluation by investors. By integrating signaling mechanisms, the essay proposes that patenting patterns can signal to investors about firms’ intentions and potential. The results encourage future researchers to acknowledge the interplay of patenting behavior and patenting velocity to promote a differentiated approach that maximizes firms’ market evaluation.

Essay 2 introduces balanced sourcing portfolios as reflecting firms’ efforts to simultaneously rely on both internal (internal R&D) and external (alliances) sourcing. I suggest that using balanced sourcing portfolios allows firms to increase overall performance by separating the development of sensing and seizing capabilities. Further, the essay conceptualizes and operationalizes stiff slack as the most difficult-to-redeploy absorbed slack category. Given possible conflicting routines introduced by the use of stiff slack, I hypothesize and find that firms should avoid using stiff slack in balanced sourcing portfolios to improve performance.

Essay 3 investigates the individual and joint effects that racial diversity in the upper management group (UMG) and regulatory focus of the CEO have in deciding the composition of firms’ alliance portfolios. Using categorization elaboration, social contact, and regulatory focus mechanisms, I find that while matching levels of UMG racial diversity and CEO regulatory focus (congruence) at low levels of racial diversity tilt the composition of firms’ alliance portfolios in a more exploratory direction, mismatching levels (incongruence) tilt it a more exploitative direction. Polynomial regression and response surface analysis show support.

Managerial implications: Understanding what factors affect innovation is both important and relevant for managers of firms in technology-intensive industries. This dissertation encompasses of three essays, each focusing on one distinct category of factors with implications on firm innovation: factors that determine innovation, factors that may interact with innovative efforts, and factors that result from innovating. Overall, this dissertation helps managers better understand the role that innovation plays for firms in technology-intensive industries.



Technological innovations, Patents, Portfolio management, Diversity in the workplace, Regulatory focus (Psychology)


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