GETTING TO INNOVATION: SEQUENTIALLY EXPLORING AND EXPLOITING TECHNOLOGICAL CAPABILITIES

Exploring and exploiting technological capabilities are essential steps in the innovation process. We examine this process by exploring the complementary and substitutive relationships between exploring and exploiting technological capabilities that takes place within innovative firms. With patent data on Korean firms enlisted in the Korean Stock Exchange Market, we find that both prior exploring and exploiting technological capabilities are positively related to subsequent exploiting technological capability a year after. We also find that there is a negative effect on subsequent exploiting technological capability when a firm conducts both exploration and exploitation simultaneously. Our study contributes to the understanding of the behaviour of firms with respect to their innovation activities, as reflected by their patent activities.