Do scientific knowledge flows inspire exploratory innovation? Evidence from US biomedical and life sciences firms

Exploratory innovation relies heavily on a constant stream of new external knowledge that can be combined and recombined with existing knowledge. Scientific knowledge flows, derived from research articles, provide essential external knowledge elements for exploratory innovation. However, few studies have explored the role of scientific knowledge flows in this context. This study examines how three characteristics of scientific knowledge flows-intensity, breadth, and novelty-impact exploratory innovation, using US biomedical and life sciences firms as the sample. Additionally, we investigate the moderating role of a firm's internal knowledge base diversity in these relationships. Using a novel topic-based content analysis method, Scientific Evolutionary Pathways, we measure the breadth and novelty of scientific knowledge flows. Our results indicate that intensive scientific knowledge flows tend to generate more exploratory innovation, while the breadth and novelty of scientific knowledge flows exhibit inverted U-shaped relationships with exploratory innovation. Furthermore, the diversity of a firm's internal knowledge base negatively moderates the relationship between the intensity of scientific knowledge flows and exploratory innovation and flattens the inverted U-shaped relationships between the breadth and novelty of scientific knowledge flows and exploratory innovation.