| This dissertation investigates how entrepreneurial firms apply technological knowledge to alternate applications, introduced as cross-application, in the biotechnology industry. Preliminary field study of two unsuccessful and two successful firms are used to motivate the need to address how firms can overcome application myopia and application dependence, where the former stems from entrepreneurial founders' inclination to focus on the narrow functionality of existing technological knowledge and the latter occurs because entrepreneurial firms are resource-constrained. I then utilize a data set of 2305 patents from 107 randomly-selected venture-capital backed firms to investigate how alliances affect cross-application; the impact of exploring new applications on cumulative innovation; and the affect of cross-application on the longevity of the firm. First, findings suggest that marketing alliances are essential to leveraging existing technological knowledge into new applications, especially in clinical development and targeting desired treatment areas. Second, findings suggest that exploring new applications might not directly influence the firm, as they result in fewer citations, but spur greater diversity in subsequent innovation. Third, findings suggest that cross-application results in increasing firm longevity, regardless of whether the firm exits and exit mode. The implications of these findings suggest new perspectives when approaching the role of marketing alliances in innovation; the issue of appropriability in generating diversity in cumulative innovation; and the types of technological diversification that can lead to strategic renewal in high-tech entrepreneurial firms. Overall, this dissertation provides new insights on recombining knowledge to evolve technological knowledge and produce innovation. |
