This paper seeks to illuminate empirically a class of drivers of firm performance hitherto neglected in the economic literature. To accomplish this objective, we distinguished three elements: sales volume, participation in technology alliancing, and successful patent issuing. Our findings suggest that competitive pressure posed by larger rivals in an industry affects sales performance negatively, but the possession of absorptive capacity can counter this deleterious effect. Findings regarding the effects caused by a product portfolio with high technological content are mixed. Depending on the performance measure applied, the results show evidence of adverse outcomes for sales, U-shaped effects for participation in technology alliancing and inverted U-shaped results for patenting. We obtained our raw data from the 2006 and 2008 PITEC database, which is the Spanish equivalent of the EU Community Innovation Survey. Our sample embraces more than 3000 firms.
Alcácer, J. — Chung, W. (2007): Location Strategies and Knowledge Spillovers. Management Science, 53(5): 760–776.
Almirall, E. — Casadeus-Masanell, R. (2010): Open versus Closed Innovation: A Model of Discovery and Divergence. Academy of Management Review, 35(1): 27–47.
Anderson, P. — Tushman, M.L. (1990): Technological Discontinuities and Dominant Designs: A Cyclical Model of Technological Change. Administrative Science Quarterly, 35: 604–633.
Ansoff, H.I. — Stewart, J.M. (1967): Strategies for a Technology-Based Business. Harvard Business Review, 45(6): 71–83.
Arbussá, A. — Coenders, G. (2007): Innovation Activities, Use of Appropriation Instruments and Absorptive Capacity: Evidence from Spanish Firms. Research Policy, 36(10): 1545–1558.
Barge-Gil, A. (2010): Open, Semi-Open and Closed Innovators: Towards an Explanation of Degree of Openness. Industry and Innovation, 17(6): 577–607.
Barnett, W.P. — Sorenson, O. (2002): The Red Queen in Organizational Creation and Development. Industrial and Corporate Change, 11(2): 289–325.
Barroso, A. — Giarratana, M.S. (2013): Product Proliferation Strategies and Firm Performance: The Moderating Role of Product Space Complexity. Strategic Management Journal, 34(12): 1435–1452.
Baum, J.A.C. — Silverman, B.S. (2004): Picking Winners or Building Them? Alliance, Intellectual, and Human Capital as Selection Criteria in Venture Financing and Performance of Biotechnology Start-ups. Journal of Business Venturing, 19(3): 411–436.
Carroll, G.R. — Swaminathan, A. (2000): Why the Microbrewery Movement? Organizational Dynamics of Resource Partitioning in the US Brewing Industry. American Journal of Sociology, 106(3): 715–762.
Chiaroni, D. — Chiesa, V. — Frattini, F. (2011): The Open Innovation Journey: How Firms Dynamically Implement the Emerging Innovation Management Paradigm. Technovation, 31(1): 34–43.
Cohen, W. — Levinthal, D. (1989): Innovation and Learning: The Two Faces of R&D. Economic Journal, 99: 569–596.
Cohen, W. — Levinthal, D. (1990): Absorptive Capacity: A New Perspective on Learning and Innovation. Administrative Science Quarterly, 35(1): 128–152.
Dobrev, S. — Carroll, G.R. (2003): Size (and Competition) among Organizations: Modelling Scale-Based Selection among Automobile Producers in Four Major Countries, 1885–1981. Strategic Management Journal, 24(6): 541–558.
Dobrev, S. — Kim, T.Y. — Carroll, G.R. (2002): The Evolution of Organizational Niches: U.S. Automobile Manufacturers, 1885–1981. Administrative Science Quarterly, 47(2): 233–264.
Dobson, A.J. (2002): An Introduction to Generalized Linear Models. New York: Chapman & Hall.
Eggers, J.P. (2012): All Experience is not Created Equal: Learning, Adapting, and Focusing in Product Portfolio Management. Strategic Management Journal, 33(3): 315–335.
Escribano, A. — Fosfuri, A. — Tribo, J.A. (2009): Managing External Knowledge Flows: The Moderating Role of Absorptive Capacity. Research Policy, 38(1): 96–105.
Fabrizio, K.R. (2009): Absorptive Capacity and the Search for Innovation. Research Policy, 38(2): 255–267.
Folta, T.B. — Cooper, A.C. — Baik, Y.S. (2006): Geographic Cluster and Firm Performance. Journal of Business Venturing, 21(2): 217–242.
Gans, J.S. — Stern, S. (2003): The Product Market and the Market for “Ideas”: Commercialization Strategies for Technology Entrepreneurs. Research Policy, 32(2): 333–350.
Garud, R. — Kumaraswamy, A. (1993): Changing Competitive Dynamics in Network Industries: An Exploration of Sun Microsystems Open Systems Strategy. Strategic Management Journal, 14(5): 351–369.
Giarratana, M.S. (2004): The Birth of a New Industry: Entry by Start-ups and the Drivers of Firm Growth: The Case of Encryption Software. Research Policy, 33(5): 787–806.
Giarratana, M.S. — Fosfuri, A. (2007): Product Strategies and Survival in Schumpeterian Environments: Evidence from the US Security Software Industry. Organization Studies, 28(6): 909–929.
Goodman, L.A. — Kruskal, W.H. (1954): Measures of Association for Cross Classifications. Journal of the American Statistical Association, 49: 732–764.
Greene, W.H. (2008): Econometric Analysis. New Jersey: Prentice Hall.
Helfat, C.E. (1997): Know-How and Asset Complementarity and Dynamic Capability Accumulation: The Case of R&D. Strategic Management Journal, 18(5): 339–360.
Henderson, R. — Cockburn, I. (1996): Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery. RAND Journal of Economics, 27(1): 32–59.
Hosmer, D.W. — Lemeshow, S. (1989): Applied Logistic Regression. New York: Wiley.
Jaffe, A. — Trajtenberg, M. — Henderson, R. (1993): Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations. Quarterly Journal of Economics, 108(3): 577–598.
Jones, G.R. — Hill, C.W.L. (1988): Transaction Cost Analysis of Strategy-Structure Choice. Strategic Management Journal, 9(2): 159–172.
Kim, D.J. — Kogut, B. (1996): Technological Platforms and Diversification. Organization Science, 17(3): 283–301.
Klepper, S. — Simons, K.L. (2000): Dominance by Birthright: Entry of Prior Radio Producers and Competitive Ramification in the U.S. Television Receiver Industry. Strategic Management Journal, 21(10–11): 997–1016.
Lancaster, K.M. (1990): The Economics of Product Variety. Marketing Science, 9(3): 189–211.
Laursen, K. — Salter, A. (2006): Open for Innovation: The Role of Openness in Explaining Innovation Performance among U.K. Manufacturing Firms. Strategic Management Journal, 27(2): 131–150.
Lee, S. — Park, G. — Yoon, B. — Park, J. (2010): Open Innovation in SMEs — An Intermediated Network Model. Research Policy, 39(2): 290–300.
Nelson, R.R. — Winter, S. (1982): An Evolutionary Theory of Economic Change. Cambridge, MA: Harvard University Press.
Sakkab, N.Y. (2002): Connect — Develop Complements Research — Develop at P—G. Research-Technology Management, 45(8): 38–45.
Santamaria, L. — Nieto, M.J. — Barge-Gil, A. (2009): Beyond Formal R&D: Taking Advantage of Other Sources of Innovation in Low- and Medium-Technology Industries. Research Policy, 38(3): 507–517.
Schmalensee, R. (1978): Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry. Bell Journal of Economics, 9(2): 305–327.
Sorenson, O. (2000): Letting the Market Work for You: An Evolutionary Perspective on Product Strategy. Strategic Management Journal, 21(5): 577–592.
Teece, D.J. (1986): Profiting from Technological Innovation: Implications for Integration, Collaboration, Licensing, and Public Policy. Research Policy, 15(6): 285–305.
The Economist (2011a): The Next Big Bet. 1 October 2011.
The Economist (2011b): Economies of Scale Made Steel. 12 November 2011.
van den Bosch, F.A.J. — Volberda, H.W. — de Boer, M. (1999): Co-Evolution of Firm Absorptive Capacity and Knowledge Environment: Organizational Forms and Combinative Capabilities. Organization Science, 10(5): 551–568.
Zahra, S.A. — George, G. (2002): Absorptive Capacity: A Review, Re-Conceptualization, and Extension. Academy of Management Review, 27(2): 185–203.