The Effect of Technological Complexity on Innovation Performance, Employee Entrepreneurship and Mobility : Three Essays

Technological innovation, knowledge diffusion and employee entrepreneurship and mobility are closely related phenomena. Multiple literature streams in strategy, entrepreneurship and technology management focus on explaining them. However, relatively little is known about the micro-level variation in technological tasks as their driver. To improve our understanding of the role technology plays in these phenomena, I examine how the complexity of the technological problems that employees solve affects innovation performance and employees’ choices about entrepreneurship and mobility. In essay 1 I examine whether modeling the innovative process as an iterative and adaptive search of boundedly rational agents is a valid approach. I develop a novel measure of technological complexity and empirically analyze how technological complexity affects innovation performance. In essay 2 I develop a model connecting attributes of technological tasks with the probability of idea rejection within incumbent firms. I show that rejection of profitable ideas within incumbent firms may occur without asymmetric information, incomplete contracts or resource constraints. In essay 3 I look at how technological complexity affects decisions to engage in employee entrepreneurship and mobility within the context of the U.S. semiconductor industry. The dissertation highlights a new driver of innovation patterns, knowledge flows and employee entrepreneurship and mobility with implications for firm performance and competitive dynamics