Portal de Periódicos da CAPES

Above-Normal Growth of Innovative Nomads in the Perennial Gale of Creative Destruction

2019; Academy of Management; Volume: 2019; Issue: 1 Linguagem: Inglês

10.5465/ambpp.2019.13677abstract

2376-7197

Eucman Lee, Jingoo Kang, Jeho Lee,

Advanced Thermodynamics and Statistical Mechanics

Our analysis of U.S. patents shows that the numbers of patents owned by firms follow a power-law distribution–many firms only have tens or hundreds of patents, whereas a handful of firms have more than hundreds of thousands of patents. To understand the underlying mechanism that generates this extreme kind of fat-tailed distribution, we develop a computational model. Our numerical results show that such an extreme fat-tail phenomenon can arise when competition for innovation is characterized by positive feedback between R&D and profits, where winners with more innovations perform better and better over time as they invest in R&D more aggressively. We propose that this positive feedback process could be a potential explanation for why some firms grow extremely larger than others.