INNOVATION AND FIRM VALUE: THE STRENGTH OF POROUS THICKETS
The importance of patented inventions in generating firm value has long been recognized. In this research we investigate the assumption that dense patent thickets are associated with increased value and argue that in certain contexts, porous thickets will actually be associated with increased value. We hypothesize and find that the recency (or age) of the knowledge underlying the patent thicket and the competitiveness of the technological environment moderates the thicket density– firm value relationship. These results also suggest that small entrepreneurial firms with limited patent portfolios will be more successful in areas of the technology landscape where porous thickets are associated with more value. In doing so we help show when firm value is best promoted through creating stronger versus weaker barriers around innovations.