Abstract
Using patent-based metrics, this paper examines the impact that the conglomerate form may have on the scale and novelty of corporate R&D activity. It shows that firms that are more reliant on internal capital markets to reallocate resources across divisions produce both a lesser number of innovations and also less novel innovations. Conglomerates producing more novel innovations have higher market values and appropriate organizational design helps in enhancing the novelty of innovations. Evidence gathered from a quasi-experiment strongly suggests a causal link between organizational form and R&D productivity, that is, conglomerates do stifle innovation.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
