Effects of technological diversity and core technologies on R&D efficiency

What is it about?

Although technological diversity is a complex knowledge‐integration process that requires considerable research and development (R&D) efforts, few studies have investigated the association between technological diversity and R&D efficiency in an R&D-intensive context. To bridge this gap, we empirically identify the impact of technological diversity on R&D efficiency and the contingent role of core technologies based on 516 top R&D investors worldwide from 2012 to 2018. Using a fixed-effect model, we observed the following. Unrelated technological diversity has an inverted U-shaped curve relationship with R&D efficiency, which indicates that there exists an optimal point of unrelated technological diversity. In addition, core technology plays a contingent role in this relationship by alleviating the volatility of the inverted U-shaped relationship between unrelated technological diversity and R&D efficiency. Our findings imply that a solid foundation of core technology is crucial for firms to effectively take advantage of technological diversity, especially the unrelated one, to improve R&D efficiency. Moreover, firms can make informed strategic decisions and effectively allocate resources by understanding the relationship between technological diversity, core technology, and R&D efficiency.

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