A quest in time: The value of innovation and the age, origin, and popularity of knowledge

Prior research has revealed mixed findings concerning the contribution of a firm s knowledge stock to the value of its innovations. We seek to reconcile this inconsistent evidence by studying how the age, origin, and popularity of knowledge affect the value of innovations. We claim that the age of knowledge which the firm incorporates exerts an inverted U-shaped effect on the value of its innovations. However, this effect is moderated by the origin of knowledge. Specifically, relying on knowledge from distant technological domains attenuates the value of old knowledge, whereas incorporating geographically distant knowledge enhances its value. Finally, as the firm s old knowledge base becomes more popular, its value to the firm diminishes. Analysis of the patent citations in 5,575 patents issued to 294 biotechnology firms operating in the U.S. between 1985 and 2002 supports these conjectures. Our study advances innovation research and contributes to the learning literature by underscoring the contingent value of knowledge age.