The effects of diversified technology and country knowledge on the impact of technological innovation

This study examines diversified knowledge and how it affects the impact of technological innovation. Specifically, we examine the effect of diversified technology knowledge—measured by technologies that underlie patents, and the effect of diversified country knowledge—measured by collaboration with inventors from other countries. Using Generalized Linear Latent and Mixed Modeling, we analyze 97,118 patents in the computers and communications industry and in the drugs and biotechnology industry, which were applied for and granted in the US to inventors from 13 countries over a period of 5 years. Controlling for economic and cultural variables, we find that diversified technology knowledge and diversified country knowledge are both positively associated with the impact of technological innovation. These findings provide new insights for firm managers, industry leaders, and policy makers regarding effective actions designed to increase the impact of technological innovation.