Research On The Impact Of Technological Diversification On Innovation Persistence

Diversification and persistence are two closely related basic elements in firms’innovation.As technical capacity-based market competition is becoming fiercer,firms need multiple technology base,namely,spanning their innovative activities over more than one technology.The successful practice of some leading firms,such as Canon,ZTE,TCL prove that firms diversifying their technology have a better innovation persistence.Possessing multiple range of technological competence has gradually become an important method of firms for persistent innovation and construction of competitive advantage.Many fields of knowledge support the research of technological diversification’s influence on firms’ innovation persistence.Resource-based view,theory of capacity,evolutionary theory emphasis the importance of resource(especially diversified knowledge base)for firms’s development,also pay attention to the transformation from resource to capacity and accumulation,persistence of them.Thus,scholars put forward the view of "success breeds success",which indicates that successful firms have endogenous persistence on innovation performance,and to a great extent,this kind of persistence originates from accumulation and expansion of technology base.Recent 20 years,the implication,patterns,agents and impacts of technological diversification has received concerns from domestic and foreign scholars,having become an emerging field of research.However,current research on innovation persistence is not mature in domestic but prevailing in abroad.And the concept,connotation,motivation of innovation persistence are still controversial.Throughout the existing research,most scholars explored the antecedents of persistent innovation from the non-technical perspective of strategy,organization,culture,and so on,but ignoring the impacts of technology base.The study on relevance between technological diversification and innovation persistence is not deep and systematic.Neither a completed analysis framework nor an empirical test has put into effect,especially an empirical research based on developing countries.For the deficiency of previous study,four research problems are put forward:(1)If Chinese firms’s innovation is persistent;(2)If firms’s innovation persistence is influenced by technological diversification;(3)If different impacts and synergistic effects on firms’s innovation persistence exists among different methods of technological diversification;(4)If moderating effects of product diversification and complementary assets exist between technological diversification and innovation persistence?Based on the research problems listed above,this paper builds an analysis framework of technological diversification’ impacts on innovation persistence.Furthermore,a test based on the panel data consisting of Chinese manufacturing listed firms from 2006 to 2013 is conducted.Major conclusions are as follows:(1)Domestic manufacturing listed firms commonly has a strong innovation persistence,which means that the innovation performance at period "T" is strongly and accumulatively influenced by the innovation performance at period "T-1".(2)Both GMM and GLS methods testify the positive impacts of technological diversification on firms’s innovation persistence.(3)Different ways of technological diversification impose different influence on firms’s innovation persistence significantly:related or exploiting technological diversification has positive impacts on innovation persistence,but unrelated technological diversification has no significant influence on innovation persistence and exploring technological diversification has a negative impact;What’s more,related and unrelated technological diversification have a synergistic effect on inputs of innovation persistence but no significant effects on outputs of innovation persistence,however,exploiting and exploring ways impose an adverse impact.(4)Complementary assets moderate the relationship between technological diversification and innovation persistence positively,yet the moderating effects between technological diversification and outputs of innovation persistence are not significant.In addition,the impacts of firms’ scale,age,industry attributes and R&D intensity on innovation persistence are also testified.This paper summarize the relationship between technological diversification and innovation persistence for the first time,and construct the theoretical framework of technological diversification’s influence on innovation persistence,which enrich and expand the research in technology innovation.The empirical study based on Chinese firms offers practical implication for implementation of technological diversification strategy and realization of persistent innovation.