Does technological diversification spur university patenting?

Abstract

Technological diversity, or the breadth of technological knowledge embedded in patented inventions, refers to the range of different technological or economic fields covered by a patent. This paper explores the role of diversification scope in encouraging the production of new patents in European universities by including the diversification scope as an explanatory variable in a patent production function. We hypothesize that the more diversified the patented technology in the university, the greater the production of new patents in subsequent periods. To test this hypothesis we rely on a cross-sectional sample of patents owned by 141 European universities across Europe in 2001–2004. Our empirical findings support the hypothesis of diversification, which means that the production of new patents can be spurred by promoting or stimulating greater levels of technological diversification. This result is robust to both the use of various measures of diversification and to different econometric specifications.