Next Article in Journal
Strategic Adaptive Governance and Climate Change: Policymaking during Extreme Political Upheaval
Previous Article in Journal
Exploring Precision Farming Scenarios Using Fuzzy Cognitive Maps
Article Menu
Issue 7 (July) cover image

Export Article

Open AccessArticle
Sustainability 2017, 9(7), 1239; doi:10.3390/su9071239

Dynamic Technological Diversification and Its Impact on Firms’ Performance: An Empirical Analysis of Korean IT Firms

1
Graduate School of Management of Technology, Korea University, Seongbuk-gu, Seoul 02841, Korea
2
Graduate School of Industrial Management Engineering, Korea University, Seongbuk-gu, Seoul 02841, Korea
3
Division of Industrial Management Engineering, Korea University, Seongbuk-gu, Seoul 02841, Korea
*
Author to whom correspondence should be addressed.
Received: 21 May 2017 / Revised: 11 July 2017 / Accepted: 13 July 2017 / Published: 15 July 2017
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
View Full-Text   |   Download PDF [1994 KB, uploaded 15 July 2017]   |  

Abstract

This paper aims to analyze the influence of the technological diversification on a firm’s innovation capabilities and investigates the effect of various strategies on the firm’s financial performance in a technology-oriented environment. We employ the entropy measurement to calculate technological diversification with 2095 patents, which are applied from years 2009 to 2011 by 507 firms that have participated in Korean government Information Technology (IT) Research and Development (R&D) supporting programs. In our framework, a firm should not diversify among the related technology fields, but should concentrate on a specific technology to reinforce the competitive advantage. However, in the case of the firms with sufficient resources, increasing technological diversification among the unrelated technology fields plays a key role on the firms’ performance. Furthermore, the degree of the technological diversification should be adjusted dynamically in compliance with the change of a firm’s innovation capabilities. Therefore, these results suggest that a firm should develop differentiated competitiveness through specialization by prioritizing its capabilities, and then exploit unrelated technological diversification to search for new opportunities. View Full-Text
Keywords: technological diversification; entropy measurement; time lag; resources; capabilities technological diversification; entropy measurement; time lag; resources; capabilities
Figures

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

Scifeed alert for new publications

Never miss any articles matching your research from any publisher
  • Get alerts for new papers matching your research
  • Find out the new papers from selected authors
  • Updated daily for 49'000+ journals and 6000+ publishers
  • Define your Scifeed now

SciFeed Share & Cite This Article

MDPI and ACS Style

Kook, S.H.; Kim, K.H.; Lee, C. Dynamic Technological Diversification and Its Impact on Firms’ Performance: An Empirical Analysis of Korean IT Firms. Sustainability 2017, 9, 1239.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Sustainability EISSN 2071-1050 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top