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We examine how the duration of innovation performance feedback (PF) discrepancies influences firms’ technological alliance portfolio diversity. Drawing on the behavioural theory of the firm and the resource-based view, we argue that persistent underperformance reduces diversity, while sustained overperformance increases it. Using a large dataset of technology-intensive firms, we find that the negative effect of persistent underperformance is driven by social rather than historical benchmarks, whereas the positive effect of sustained overperformance is driven by historical rather than social benchmarks. Our study contributes to technology management by showing that PF persistence – not just intensity – shapes alliance decisions and elicits distinct responses to positive versus negative feedback.
Martínez‐Noya et al. (Mon,) studied this question.