Abstract
This study examines the link between a firm's science intelligence capability, and the quantity and value of the patents that it produces. Modelling absorptive capacity as an innovation knowledge funnel, we propose that a firm's science intelligence capability rests on two sets of processes: managing its potential absorptive capacity (PACAP) and managing its realised absorptive capacity (RACAP). Measuring PACAP as the breadth of a firm's scientific activities and RACAP as its ability to identify and abandon poor performing areas of science, we test our theory using a sample of US and non-US firms in the chemical, electronics, and pharmaceutical industries. Moderate to strong support is found for our hypotheses.
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