Technological Activities and Their Impact on the Financial Performance of the Firm: Exploitation and Exploration within and between Firms


  • *Author names appear alphabetically. The authors want to thank FWO Flanders (project: G.0468.09) for financial support to conduct this research.

Address correspondence to: Rene Belderbos, Department of Managerial Economics, Strategy and Innovation, Katholieke Universiteit Leuven (Belgium). E-mail:


The present study analyzes the impact of firms' technological strategies on their financial performance. Technology strategies are defined by making a distinction between explorative and exploitative as well as collaborative and solitary technological activities. Several hypotheses are tested on a panel data set (1996–2003) of 168 research and development (R&D)-intensive firms based in Japan, the United States, and Europe and situated in five different industries (i.e., chemicals, pharmaceuticals, information and communication technologies [ICT], electronics, and nonelectrical machinery). This study's analyses confirm the existence of an inverted U-shape relationship between the share of explorative technological activities and financial performance. In addition, firms engaging more intensively in collaboration perform relatively stronger in explorative activities. At the same time, a negative relationship is observed between the share of collaborative technological activities and a firm's market value. This negative relationship is most pronounced in collaborative activities of an exploratory nature. Overall, these findings suggest that the value appropriation complexities of collaborative technological activities may offset their value-enhancing potential.