TY - JOUR
T1 - Survival of high tech firms
T2 - The effects of diversity of product-market portfolios, patents, and trademarks
AU - Srinivasan, Raji
AU - Lilien, Gary L.
AU - Rangaswamy, Arvind
N1 - Funding Information:
The authors acknowledge the financial support for this research from the Institute for the Study of Business Markets at the Pennsylvania State University. The authors also thank Dae-Ong Ahn, Sridhar Balasubramanian, Susan Broniarczyk, Rajesh Chandy, Peter Golder, Rajdeep Grewal, Michael Luchs, Venkatesh Shankar, and Rebecca Slotegraaf for helpful comments on previous versions of the manuscript. We are grateful to the Editor, AE and reviewers for their many suggestions on the manuscript.
PY - 2008/6
Y1 - 2008/6
N2 - High tech firms can mitigate potential risks by diversifying their product-market portfolios. A key research question is how such diversification influences firm survival. A firm exits the market in two ways, specifically, dissolution and acquisition. Here, we model how the diversity of a new firm's product-market portfolio influences the times to both types of exits. Specifically, we allow for interaction effects of the competitive intensity of a firm's environment and the diversity of a firm's product-market portfolio with its patents and trademarks. Using a competing risk hazard model, we estimate the effects of various covariates on the time to exit for 1435 US high tech firms. We observed that a more diverse product-market portfolio, in conjunction with a larger number of patents, hastens the time to a firm's exit by dissolution (9% decrease in survival duration), while in conjunction with a larger number of trademarks, portfolio diversity delays the time to exit by dissolution (12% increase). A more competitive firm environment results in a greater effect on the portfolio's diversity in delaying its exit by dissolution (7% increase). On the other hand, a diverse product-market portfolio, combined with either a larger number of patents or trademarks, hastens the firm's exit by acquisition (19% and 11% decrease respectively).
AB - High tech firms can mitigate potential risks by diversifying their product-market portfolios. A key research question is how such diversification influences firm survival. A firm exits the market in two ways, specifically, dissolution and acquisition. Here, we model how the diversity of a new firm's product-market portfolio influences the times to both types of exits. Specifically, we allow for interaction effects of the competitive intensity of a firm's environment and the diversity of a firm's product-market portfolio with its patents and trademarks. Using a competing risk hazard model, we estimate the effects of various covariates on the time to exit for 1435 US high tech firms. We observed that a more diverse product-market portfolio, in conjunction with a larger number of patents, hastens the time to a firm's exit by dissolution (9% decrease in survival duration), while in conjunction with a larger number of trademarks, portfolio diversity delays the time to exit by dissolution (12% increase). A more competitive firm environment results in a greater effect on the portfolio's diversity in delaying its exit by dissolution (7% increase). On the other hand, a diverse product-market portfolio, combined with either a larger number of patents or trademarks, hastens the firm's exit by acquisition (19% and 11% decrease respectively).
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U2 - 10.1016/j.ijresmar.2007.12.005
DO - 10.1016/j.ijresmar.2007.12.005
M3 - Article
AN - SCOPUS:44649100062
SN - 0167-8116
VL - 25
SP - 119
EP - 128
JO - International Journal of Research in Marketing
JF - International Journal of Research in Marketing
IS - 2
ER -