Ownership Structure, Absorptive Capacity, and Innovation: Planting Vs Harvesting Innovation

This dissertation investigates the main research question: Which classification of innovation explains the heterogeneous timing of revenue realization? Given the significance of financial gain, researchers are recommended to pay attention to whether innovation outcomes result in commercial gains in the short term. Following this notion, a new category of innovation, planting and harvesting, is presented. While harvesting innovation seeks new resources in the expectation of commercial performance in the short term, planting innovation pursues potential resources creating value over a long time period. The interest in the determinants and financial contribution of these types of innovation leads to the second research question: How do planting and harvesting innovation interact with other factors and firm performance? The need to understand innovation practices results in the third research question: How are planting and harvesting innovation implemented in a real business? Both quantitative and qualitative analyses are performed to answer these questions. Quantitative analysis examines the second research question. Based on the literature review, the relationships between ownership structure, absorptive capacity, harvesting and planting innovation, and firm performance were hypothesized. To verify these hypotheses, the financial data of high-tech small and medium-sized companies listed in Korean Stock Exchange (KSE) were analyzed through path analysis and cross-lagged analysis. Qualitative analysis was implemented to investigate the third research question. For this purpose, the case of Samsung Electronics (SE) is examined. In this study, several meaningful implications are provided. The new distinction of innovation is provided to fill the gap in innovation studies. The combination of Partial Least Square (PLS) analysis and cross-lagged analysis enabled the researcher to implement a longitudinal exploratory study with a small sample. In addition, the collection of interviews from new articles made it possible to observe the opinions of a number of executives for a long period of time. Practitioners are recommended to share investment risk to implement planting innovation. In addition, co-innovation is shown to maintain ambidexterity by implementing convergence, collaboration, and co-creation.