Title: R&D area diversity and innovation quality: a cross-functional absorptive capacity perspective

Authors: Tianyu Hou; Wei Wang; Jin Chen; Haijie Wang

Addresses: Faculty of Business for Science and Technology, School of Management, University of Science and Technology of China, Hefei, Anhui, 230026, China ' Department of Business Administration, Business School, Zhengzhou University, No. 100 Science Avenue, Zhengzhou City, 450001, Henan Province, China ' Research Center for Technological Innovation, School of Economics and Management, Tsinghua University, Beijing, 100084, China ' Department of Economics, Business School, Zhengzhou University, Zhengzhou, 450001, Henan, China

Abstract: Although many studies have investigated how the diversity of R&D human capital influences innovation performance, the impact of the diversity of functional areas in R&D centres remains poorly understood. Drawing on the absorptive capacity framework, this study examines how R&D area diversity influences innovation quality. As R&D activities are embedded in organisational social networks and knowledge networks, we further investigate how social cohesion, knowledge cohesion, and social-knowledge cohesion moderate the effect of R&D area diversity on innovation quality. We argue that R&D area diversity improves intra-organisational cross-function absorptive capacity, which enhances innovation quality. The positive effect of R&D area diversity increases when social cohesion and knowledge cohesion are high, and the coupling of social-knowledge cohesion is low. An analysis of a large longitudinal dataset of 3,061 firm-year observations covering 486 global pharmaceutical firms provides strong support for our hypotheses. We end with a discussion of the theoretical and practical implications.

Keywords: innovation quality; R&D area diversity; social cohesion; knowledge cohesion; social-knowledge cohesion; absorptive capacity; pharmaceutical firms; patents; Poisson estimation; panel regressions.

DOI: 10.1504/IJTM.2025.144792

International Journal of Technology Management, 2025 Vol.97 No.4, pp.464 - 499

Received: 05 Feb 2023
Accepted: 30 Nov 2023
Published online: 03 Mar 2025 *

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