2015/05 | LEM Working Paper Series | |
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What do firms know? What do they produce? A new look at the relationship between patenting profiles and patterns of product diversification |
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Giovanni Dosi, Marco Grazzi and Daniele Moschella |
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Abstract | ||
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In this work we analyze the relationship between the patterns of firm
diversification, if any, across product lines and across bodies of
innovative knowledge, proxied by the patent classes where the firm is
present. Putting it more emphatically we investigate the relationship
between "what a firm does" and "what a firm knows". Using a newly
developed dataset matching information on patents and products at the
firm level, we provide evidence concerning firms' technological and
product scope, their relationships, the size-scaling and coherence
properties of diversication itself. Our analysis shows that typically
firms are much more diversified in terms of products than in terms of
technologies, with their main products more related to the
exploitation of their innovative knowledge. The scaling properties
show that the number of products and technologies increase
log-linearly as firms grow. And the directions of diversification
themselves display coherence between neighboring activities also at
relatively high degrees of diversification. These findings are well in
tune with a capability-based theory of the firm.
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