Keeping Pace with Technological Change: Insights into the Recency of Internal Knowledge Inputs

The timely disengagement of a firm from its old technological achievements and the update of its core technological competencies are important issues for both management scholars and practitioners. However, a firm is naturally reluctant to abandon or replace technologies created internally and on which a large amount of resources has been spent and with which the firm is to a large extent familiar. Addressing the temporal dimension of knowledge inputs, this study develops two hypotheses that examine the effect of the recency of internal knowledge inputs on innovation performance and how this effect is moderated by internal focus. We test these hypotheses on longitudinal economic and patent data from a sample of 139 firms from the pharmaceuticals, biotechnology, and chemicals industries for a 7-year period, using fixed-effects negative binomial regression models. Findings support that the recency of internal knowledge inputs is a positive predictor of both innovation productivity and impact; however, when the recency interacts with internal focus, both the effects become negative.