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Using the entropy-based patent measure to explore the influences of related and unrelated technological diversification upon technological competences and firm performance

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Abstract

This study applies the entropy-based patent measure to explore the influences of related technological diversification (RTD) and unrelated technological diversification (UTD) upon technological competences and firm performance. The results show that RTD has a monotonically positive effect on technological competences and UTD has an inverse U-shaped effect on technological competences. Besides, the results demonstrate that the extent of the positive influence of RTD upon technological competences is better than that of UTD upon technological competences. If American pharmaceutical companies would like to adopt technological diversification, this study suggests that they should undertake RTD, rather than UTD. In addition, this study finds out that technological competences mediate the relationship between firm performance and both of RTD and UTD. Although RTD and UTD cannot significantly influence firm performance directly, they can positively affect firm performance indirectly through technological competences.

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Authors and Affiliations

  1. Department of Business Administration, National Taipei University, 151, University Road, San Shia, New Taipei City, 237, Taiwan

    Yu-Shan Chen

  2. Department of Business Administration, National Yunlin University of Science and Technology, Yunlin, Taiwan

    Ke-Chiun Chang

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  1. Yu-Shan Chen
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  2. Ke-Chiun Chang
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Correspondence to Yu-Shan Chen.

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Chen, YS., Chang, KC. Using the entropy-based patent measure to explore the influences of related and unrelated technological diversification upon technological competences and firm performance. Scientometrics 90, 825–841 (2012). https://doi.org/10.1007/s11192-011-0557-9

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