Using a novel deal/patent dataset from 1986 through 2005, this paper explores the role of knowledge flow on the firm boundary decision. I use patent self-citations and cross-citations from the United States patent database as a proxy to measure knowledge flow between and within firms. When analyzing partnerships (strategic alliances and joint ventures), I find that firms with a higher percentage of patent self-citations are more likely to choose a more integrative boundary. Additionally, the level of integration chosen is positively related to the frequency of cross-citations between firms following the formation of the partnership. Firms in partnerships also see higher abnormal returns around the partnership announcement date when their partnering firm has a higher percentage of self-citations. I find weak to no evidence that these results hold for mergers/acquisitions. Overall, the evidence suggests that knowledge assets do play a pivotal role in the firm boundary choice.
| Identifer | oai:union.ndltd.org:GEORGIA/oai:scholarworks.gsu.edu:finance_diss-1024 |
| Date | 24 April 2014 |
| Creators | Stonitsch, Todd |
| Publisher | ScholarWorks @ Georgia State University |
| Source Sets | Georgia State University |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | Finance Dissertations |
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