Research On The Influence Of Performance Feedback On Firm’s Propensity To Patent

According to the data from World Intellectual Property Organization(WIPO),China’s patent applications ranks first in the world in 2021.For firms in both developed countries such as the United States and Japan,and in emerging economies such as China,patent is one of the most important technology protection mechanism,and has become an important proprietary asset to participate in global competition.Propensity to patent refers to the propensity of firms to file patent applications for their inventions(Pérez-Lu?o and Valle-Cabrera,2011).Firms often make trade-offs between formal legal protection(such as patent applications)and confidential forms(such as trade secrets)according to their needs(Hall et al.,2014).It is common that most innovative firms,such as Huawei,Samsung and Apple,and especially in the communications industry,prefer a strong propensity to patent.Firms are in a dynamic market environment,and the propensity to patent is an organizational innovation action.As such,the behavior theory of the firm may provide a reasonable explanation for why and under what circumstances firms have different degrees of propensity to patent.In the literature on the antecedents of propensity to patent,some factors are discussed,including resource and capacity factors(such as firm size and R&D investment),willingness(such as R&D cooperation and technical characteristics),and macro policies(such as innovation policies).Unfortunately,there is a lack of research on how different situations of positive and negative attainment discrepancy will affect propensity to patent from the perspective of performance feedback.At the same time,in the aspects of consequences of performance feedback,scholars have paid attention to innovation strategy,firm strategic orientation or adjustment,venture capital decisions,and internationalization activities,while talking little about the impacts of performance feedbacks on propensity to patent.In practice,different performance feedbacks of positive and negative attainment discrepancy will influence the actions of firms.Can performance feedback really affect the propensity to patent? What is the intermediate process like between the positive and negative performance feedback and propensity to patent? What contextual factors will influence this process? These are important but unexplored issues.Incorporating the behavioral theory of the firm,ambidextrous innovation,and knowledge-based view,this study constructs a research framework of “ performance feedback—ambidextrous innovation—propensity to patent ”,and discusses the impact of performance feedback on propensity to patent,the impact of performance feedback on ambidextrous innovation,the relationship between ambidextrous innovation and propensity to patent,the mediating role of ambidextrous innovation,and the moderating effect of patent stock and knowledge breadth.Through the empirical analysis of 220 Chinese listed companies in the communications industry from 2013 to 2021,this study tests the direct effects of the positive and negative attainment discrepancy on propensity to patent,the mediating effects of both exploratory innovation and exploitative innovation,and the moderating effects of both patent stock and knowledge breadth.We have fouth main findings.First,the positive attainment discrepancy and negative attainment discrepancy deficit affect firms’ propensity to patent,and the effects are not the same.Second,the positive and negative attainment discrepancy do have different effects on ambidextrous innovation,,with the positive attainment discrepancy has an inverted Ushaped relationship with exploratory innovation and exploitative innovation,and the negative attainment discrepancy negatively affects the exploitative innovation.Third,exploratory and exploitative innovation play a mediating role between performance feedback and firms’ propensity to patent.Finally,patent stock and knowledge breadth both positively moderate the relationship between exploitative innovation and propensity to patent,but they negatively moderate the relationship between exploratory innovation and propensity to patent.This study has three theoretical contributions.First,the investigation of the relationship between performance feedback and propensity to patent may enrich the research on the antecedents of propensity to patent and the consequences of performance feedback,which contributes to the Behavior Theory of the Firm.Second,based on the ambidextrous innovation,we introduce the exploratory innovation and exploitative innovation to open the “black box” of the process of performance feedback influencing propensity to patent.This provides a reasonable explanation for innovation behavior under different performance feedback,and helps understand the different effects of exploratory and exploitative innovation on propensity to patent.Third,drawing on the Knowledge-based View,we identify two situational factors of patent stock and knowledge breadth that affect the relationship between ambidextrous innovation and propensity to patent.This provides a new perspective to understand how ambidextrous innovation,interacting with other factors,will influence propensity to patent,thus adds to the literature on the Knowledge-based View.The empirical evidence and useful implications for firms’ innovation actions and propensity to patent under different performance feedback situations provided in this study may support Chinese firms to choose appropriate innovation actions and make patent decisions according to internal and external environmental changes and their own knowledge conditions.This is conducive to promoting the patenting capabilities of Chinese firms.