Corporate scientific research’s impact on firm’s market and innovation performance: on the focus of author embedded knowledge

Abstract

Corporate scientific research has been empirically treated as it fails to provide adequate incentives for firms due to issues with appropriability and unintended spillovers. Researchers have found, however, that scientific research can help firms perform better in the market although their publication trend is declining. Amongst new literatures emphasizing the importance of upstream participation in firms' performance, there are still gaps to fill in order to explain how basic research impacts firms. In other words, studies examining science to technology linkages showed insufficient connection between patent and publication or science-to-technology linkage and firm performance. In addition, research analyzing the impact of firms' scientific publications on innovation and corporate performances has been sparse. To fill this gap, this study analyses the effects of science to technology linkage on firm performances by measuring author's tacit and embedded knowledge. To be specific, this study not only connects patents and publications at individual knowledge level, but also further examine its effect on firm's innovation and market performance. Our results show that researcher’s embedded knowledge being utilized in science to technology linkage has significant impact on innovation(negative) and market(positive) performance. In addition, researcher's tacit knowledge in science to technology linkage has significant positive relation towards both firm's innovation and market performance. By fully connecting science to technology and firm performance, our study contributes to enhanced understanding of corporate science and accommodates breakthrough methodologies in measuring embedded knowledge. This research shows the importance of tacit and embedded knowledge in corporate science utilization process through invention into firm performance, suggesting corporations to reconsider research activities in enhancing their values.