What Do Firms Know? What Do They Produce? A New Look at the Relationship between Patenting Profiles and Patterns of Product Diversification

Quaderni - Working Paper DSE N° 1004

21 Pages Posted: 13 May 2015

See all articles by Giovanni Dosi

Giovanni Dosi

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM)

Marco Grazzi

Universita' Cattolica del Sacro Cuore

Daniele Moschella

Scuola Superiore Sant'Anna di Pisa

Date Written: May 11, 2015

Abstract

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 diversification 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 with firm size. 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.

Keywords: Diversification, Coherence, Patents, Products, Capabilities, Firm behaviour

JEL Classification: C81, D22, L20, L25, O31

Suggested Citation

Dosi, Giovanni and Grazzi, Marco and Moschella, Daniele, What Do Firms Know? What Do They Produce? A New Look at the Relationship between Patenting Profiles and Patterns of Product Diversification (May 11, 2015). Quaderni - Working Paper DSE N° 1004, Available at SSRN: https://ssrn.com/abstract=2604996 or http://dx.doi.org/10.2139/ssrn.2604996

Giovanni Dosi (Contact Author)

Scuola Superiore Sant'Anna di Pisa - Laboratory of Economics and Management (LEM) ( email )

Piazza Martiri della Liberta, 33
Pisa, I-56127
Italy

HOME PAGE: www.lem.sssup.it

Marco Grazzi

Universita' Cattolica del Sacro Cuore ( email )

1 Largo A. Gemelli
Milano (Milan), MI Milano 20123
Italy

Daniele Moschella

Scuola Superiore Sant'Anna di Pisa ( email )

Biblioteca Scuola Superiore Sant'Anna
Piazza Martiri della Liberta, n. 33
Pisa, 56127
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
39
Abstract Views
559
PlumX Metrics