Information technology and innovation outcomes: is knowledge recombination the missing link?

Abstract

Firms’ use of information technology (IT) has been suggested to be an important enabler of knowledge production, leading to innovation outcomes in the form of patent inventions. However the innovation process through which IT use influences patent inventions is largely unclear. We draw on the knowledge recombination perspective and develop a model that explains the innovation process through which IT use influences innovation outcomes by looking into a firm’s efforts to recombine existing knowledge (i.e., knowledge recombinant intensity) and the scope of knowledge that is recombined by a firm (i.e., knowledge recombinant diversity). We also distinguish innovation outcomes in terms of patent quantity and quality. Using a large-scale panel dataset, we show that IT use has a stronger impact on knowledge recombinant intensity relative to knowledge recombinant diversity. Moreover, knowledge recombinant intensity and knowledge recombinant diversity play key mediating roles in the relationships between IT use and patent inventions. The impact of IT use on patent quantity is partially mediated, while the impact of IT use on patent quality is fully mediated. Our findings indicate that while IT use can directly affect patent quantity, its impact on patent quality must be channelled through a firm’s knowledge recombinant efforts and scope.