How Information Technology Influences Patenting Innovation: A Knowledge Recombination Perspective

Firms’ investment in information technology (IT) has been suggested as an important organizational resource enabler of knowledge production, leading to patenting innovation. In the prior literature, however, the process through which IT investment influences patenting innovation outputs remains unclear. To open up this black box in our understanding of IT and innovation, we draw on the knowledge recombination perspective and develop a model to characterize the innovation process as a firm’s efforts of recombining existing knowledge (i.e., knowledge recombinant intensity) and the scope of knowledge that is recombined by a firm (i.e., knowledge recombinant diversity). Using large-scale panel data over 10 years, we found robust empirical evidence corroborating our theory. We also provide additional insights by enriching the measures of IT as aggregate investment and different types of infrastructure and the measures of patenting innovation outputs as quantity and quality. Overall, our results provide new findings on the complex innovation process, through which IT resource input does not necessarily lead to more innovation, but does play a salient role in generating better innovation