Management Papers

Document Type

Journal Article

Date of this Version

1-2014

Publication Source

Academy of Management Proceedings

DOI

10.5465/AMBPP.2014.12314abstract

Abstract

We examine the relationship between firms’ within- and across-inventor team composition and firm-level innovation. An empirical regularity in the prior literature on inventor teams is that diversity, as measured by factors such as prior technology experience, can positively influence a team’s innovative performance. The literature has remained silent, however, on the issue of how an inventor team’s presence within the broader context of the firm influences the firm’s aggregate innovative output. This question has implications for understanding the optimal allocation of production-related human capital, particularly in resource-constrained start-up environments. We assemble a panel dataset of start-up biotechnology firms founded between 1980 and 2000, tracked from founding through 2009, to develop and test hypotheses regarding the link between team structure and firm-level forward patent citations. We find that innovation is best promoted with greater across-team diversity and lower within-team diversity. This result is moderated by the firm’s product development stage, the complexity of its technology environment, joint experience among the firm’s inventors, and the degree to which production team structure is modulated over time. We find important differences in the results when running a parallel analysis at the patent team-level, which provides further evidence in support of the idea that within- firm production team organization structure influences firm-level innovation output. An implication is that prior results in the literature regarding knowledge production teams may not generalize to the firm-level of analysis.

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Date Posted: 19 February 2018