When to commit more to a technological entry: Evidence of the follow-up patenting action of bearings manufacturers

Abstract

While consistently making forays into new domains is common practice, a follow-up action represents a greater realization of the value of a prior entry. Subsequent to technological entries into new domains, why and when to follow up, in terms of a follow-up patenting action in the newly entered domain, is relatively sidelined in the technology management literature. This paper departs from the knowledge-based view on follow-up patenting action to the moderating roles of competitive intensity and learning speed in order to explore persistent innovation behavior under uncertainty. In a sample of 474 technological entries of fifteen top bearings manufacturers during 1990-2004, the study serves as a multilevel account of the interplay between patent, firm and field. Our results show not only the contrasting influences of a firm's knowledge depth and breadth on its propensity to follow up on prior entries but also the boundary conditions of such causal relationships. As a response to the recent call for more empirical inquiry into the dynamics of R&D investment, our evidence identifies the theoretical sensitivity of the knowledge-based view to contextual factors and sheds new light on the complex nature of follow-up patenting, particularly when firms are subject to external uncertainty caused by competitive rivalry and internal uncertainty due to learning speed.