Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/22457
Title: The moderating effects of knowledge characteristics of firms on the financial value of innovative technology products
Authors: Liu, X
Yeung, ACL 
Lo, CKY 
Cheng, TCE 
Keywords: Innovative technology products
Knowledge characteristics
Knowledge-based view
Patent citation
Return on assets
Issue Date: 2014
Publisher: Elsevier
Source: Journal of operations management, 2014, v. 32, no. 3, p. 79-87 How to cite?
Journal: Journal of operations management 
Abstract: The development of innovative technology products is both costly and risky, and their economic value is highly uncertain. Based on a sample of 312 innovative technology products introduced between 1987 and 2006 in the U.S. and a long-horizon event study with control firms, we study the impact of innovative technology products on the long-term financial performance of a firm. In particular, we examine how the knowledge characteristics of the firm, which embrace its knowledge absorptive capacity, knowledge impact, and knowledge diversity, moderate such an impact. We find that on average an innovative technology product increases the firm's return on assets (ROA) (relative to control firms) by 2.18% in the second year after product introduction. However, the value of an innovative technology product varies with the knowledge characteristics of the firm that invented it. We find that the financial impact of technology products is stronger when firms have higher knowledge absorptive capacity, and more impactful and less diversified knowledge (as measured by patents). We classify firms into three categories based on their knowledge characteristics. We find that firms with a high knowledge fit increase their ROA by 4.55% after product introduction, while those with a low knowledge fit receive no benefit from the innovative technology products at all.
URI: http://hdl.handle.net/10397/22457
ISSN: 0272-6963
DOI: 10.1016/j.jom.2013.11.003
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