Diversified or specialised: firms' patent portfolio strategies under heterogeneous technology standards

Research has highlighted the role of patent portfolio strategy on firms' innovation without elaborating on how to layout the diversity of patent portfolios to improve innovation quality. Drawing on the resource-based view and institutional theory, this research attempts to extend patent portfolio-innovation debate by examining the moderating effects of policy or specifically, technology standard on the patenting-innovation relationship. We argue that the leverage of technology standard could help firms optimise patent portfolios by accessing information, reducing transaction costs, and promoting complementary innovation, and therefore leads to higher innovation quality. Moreover, considering heterogeneous technology standards, in the context of relatively complex and rapidly updated technology standards, specialised patent portfolios are more significant for firms to enhance substantive innovation. Our analysis of data from 729 Chinese manufacturing listed companies provides supports for both the moderating role of technology standard on the patent portfolio-innovation relationship. This paper contributes to patent management literature by elaborating upon the mechanisms of how technology standard can be leveraged to capture value from firms' patent portfolios.