A Technological Return to Originating Firms from Knowledge Spillovers: A New Strategic Tool or an Unintentional Side Effect?

This paper empirically examines one of the benefits of outbound technology; i.e., technological returns to originating firms which revealed, licensed, or simply spilled over their technologies. Most open technological innovation literature has focused on inbound innovation, with few papers mentioning the value of outbound technological innovation. These papers found the phenomena of learning-by-exposure or recipient-guided unfamiliar knowledge exploration, which entails technological learning by an original technology holder from those who had learned from the originator. Although this discovery is unique, they left one question: Can outbound technology be used as a strategic tool to learn from technological alliance partners? We examined this by using patents from 114 research consortia with the assumption that citations of patents with certain time-lags represent knowledge flows between two parties. We analyzed 913 backward and forward citation pairs that share the same applicant. Our quantitative test illustrates the positive effect of technological knowledge spillovers and subsequent absorption of the focal technology. Patents indirectly citing patents from originating firms via patents from others show significantly high technological value; however, this effect is only observed in spillovers to third parties of research consortia. In other words, recipient-guided exploration is an almost-uncontrollable side effect. At the same time, our analysis revealed that knowledge spillovers are not always negative for originating firms.