The role of corporate technology strategy and patent portfolios in low-, medium- and high-technology firms

Abstract

Previous research into technology strategies and patent portfolios has focused on high-technology firms, whereas low- and medium-technology companies have been relatively neglected. Therefore, we analyze how corporate technology strategy and the size and composition of patent portfolios affect the performance of low-, medium- and high-technology firms. Data from 136 European companies are used to examine four hypotheses relating financial performance to technological diversification, technological aggressiveness, patent portfolio size, and patent portfolio quality. The cross-industry sample allows analyzing the different consequences of these strategic parameters in low-, medium- and high-technology firms by considering technological intensity as a moderator. Our first finding is that the positive impact of technological aggressiveness is limited in low- and medium-technology companies. Secondly, technological diversification has a positive effect in high-technology firms and a negative effect in low-technology firms. Thirdly, patent portfolio size has a positive effect only in high-technology firms. Finally, patent portfolio quality has an equally positive influence on all firms' performance. In part, these results conflict with the findings of previous research into high-technology companies, and they call for rethinking the role of technology strategies and intellectual property portfolios in firms across industries.