Patents are widely recognized to provide legal protections to a firm’s inventions. However, such protections are dependent upon claims that delineate the exclusive rights of the patent. This study examines theoretically and empirically the role of exploitive and explorative search on a firm’s patent claims in the biotechnology industry. We argue that firms are subject to ‘boundedly rational’ behaviors where firms are unable to cite their patent’s prior art and therefore are unable to identify with their patent’s novel claims. A firm’s exploitive and explorative search is offered as a solution to overcoming such bounded rationality. We argue and find that a biotechnology firm’s exploitive and explorative search has an inverted u-shaped relationship to a firm’s patent claims. A key contribution of this study is that a firm’s citation behavior is not only attributed to strategic and legal motivations, but also be to behavioral explanations.

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Purpose The purpose of this study is to theoretically and empirically advance a concept of competitive antecedents to absorptive capacity (AC) research and to explain their relationship to a firm’s innovative performance. A firm’s competitive antecedents involve a relative advantage in a firm’s ability to access external knowledge – (i.e. relative advantage in external knowledge flows) – and a relative advantage in appropriating these external knowledge flows (i.e. relative advantage in appropriability regime). Design/methodology/approach By drawing on network and market share explanations, hypotheses were developed in which a firm’s AC is argued to mediate the influence of these competitive antecedents on a firm’s innovations. In using linear and negative binomial estimation methods, a mediation analysis of the US biotechnology industry was conducted. Findings A firm’s competitive antecedents have a positive influence on a firm’s AC and that these influences indirectly impact a biotechnology firm’s product innovations. Originality/value While a firm’s innovation is widely attributed to its AC, this study’s concept of competitive antecedents shows that a firm’s competitive advantage lies upstream from its AC.

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