Innovation, Recombination and Technological Proximity

This article investigates the relation between recombinative capabilities, innovation and alliance strategies for 71 firms in the Information Communication Technologies (ICT) sector, through a panel data analysis. In particular, it explores the impact of two factors on innovation. The first is the recombinative capabilities of firms, which are measured by the breadth of their patents. The second is their alliance strategies, which are measured in terms of technological proximity with partners. The results reveal that recombinative capabilities increase innovative output. However, there is a limit to this positive effect. Beyond this limit, recombinative capabilities reduce innovation intensity. In other words, after a threshold, the wider is the breadth of the firm’s patents, the less is the number of them. This relationship also depends on the technological proximity with alliance partners. High recombinative capabilities are best complemented by technologically proximate alliance partners, who permit refinements in existing domains, without augmenting costs of variety management. Copyright Springer Science+Business Media New York 2014