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Research Summary We consider the role of individual‐level diversification as a mechanism through which skilled researchers engage in successful exploration—recognizing and integrating new knowledge external to one's domains of expertise. To approach an ideal experiment, we (a) employ a matching procedure and (b) exploit the unexpected adoption of Microsoft Kinect as a motion‐sensing technology in research. We evaluate the impact of Kinect and its embodiment of new knowledge on a set of ability‐matched, diversity‐varying researchers without prior experience in motion‐sensing and find that diversified researchers explore more successfully than their more specialized peers. We also examine the role of personal preferences and professional incentives as antecedents of diversification and find that culture, age and intellectual freedom are positively associated with the propensity to diversify successfully. Managerial Summary Organizations where R&D is core to driving competitive advantage face important tradeoffs when hiring researchers. Specifically, diverse combinations of knowledge generate the most impactful discoveries. Yet, coordinating such combinations increasingly requires larger teams as knowledge accumulation causes researchers to specialize in narrower areas. How should organizations achieve the best balance? We argue and show evidence that diversified researchers, individuals routinely criticized for their lack of knowledge depth, are more likely than specialized researchers of similar ability to integrate new knowledge from beyond their domains of expertise to create impactful innovations. Therefore, organizations aiming to create competitive advantage by pushing the boundaries of knowledge should carefully consider the nuanced tradeoffs between specialized and diversified researchers when strategizing about hiring the optimal types of expertise.

As open source software (OSS) is increasingly used as a key input by firms, understanding its impact on productivity becomes critical. This study measures the firm-level productivity impact of nonpecuniary (free) OSS and finds a positive and significant value-added return for firms that have an ecosystem of complementary capabilities. There is no such impact for firms without this ecosystem of complements. Dynamic panel analysis, instrumental variables, and a variety of robustness checks are used to address measurement error concerns and to add support for a more causal interpretation of the results. For firms with an ecosystem of complements, a 1% increase in the use of nonpecuniary OSS leads to an increase in value-added productivity of between 0.002% and 0.008%. This effect is smaller for larger firms, and the results indicate that prior research underestimates the amount of IT firms use. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2977 . This paper was accepted by Chris Forman, information systems.