Start Date
12-17-2013
Description
IT industry has become patent-intensive due to the rapid advances in technology and the fierce competition among firms. While prior studies indicate financial returns from investments in IT patents are unclear, recent patent wars in IT industry suggest that IT patents may be of great value. We examine the impact of IT patents as an intangible IT resource on firm value in IT industry, while also considering the moderating effect of firms’ innovation orientation (exploitative vs. explorative). Moreover, we examine how environmental uncertainty influences the relationship between firms’ IT patents, innovation orientation, and performance. Our results suggest that the impact of IT patents on firm value is positive and significant. More importantly, we find that this impact varies depending on firms’ innovation orientation. Further, we find that the moderating effect of innovation orientation is influenced significantly by the two dimensions of environmental uncertainty (i.e., competitiveness and dynamism).
Recommended Citation
Chung, Sunghun; Animesh, Animesh; Han, Kunsoo; and Pinsonneault, Alain, "Do IT Patents Matter for Firm Value? The Role of Innovation Orientation and Environmental Uncertainty" (2013). ICIS 2013 Proceedings. 15.
https://aisel.aisnet.org/icis2013/proceedings/EconomicsOfIS/15
Do IT Patents Matter for Firm Value? The Role of Innovation Orientation and Environmental Uncertainty
IT industry has become patent-intensive due to the rapid advances in technology and the fierce competition among firms. While prior studies indicate financial returns from investments in IT patents are unclear, recent patent wars in IT industry suggest that IT patents may be of great value. We examine the impact of IT patents as an intangible IT resource on firm value in IT industry, while also considering the moderating effect of firms’ innovation orientation (exploitative vs. explorative). Moreover, we examine how environmental uncertainty influences the relationship between firms’ IT patents, innovation orientation, and performance. Our results suggest that the impact of IT patents on firm value is positive and significant. More importantly, we find that this impact varies depending on firms’ innovation orientation. Further, we find that the moderating effect of innovation orientation is influenced significantly by the two dimensions of environmental uncertainty (i.e., competitiveness and dynamism).