Title: How diversification affects innovation by a Korean mobile content firm

Authors: Hyejae Jung; Eungdo Kim; Seunghyun Kim; Junseok Hwang

Addresses: Technology Management, Economics and Policy Program, College of Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-742, South Korea; Korea Institute of Science and Technology, Hwarangno 14-gil 5, Seongbuk-gu, Seoul 136-791, South Korea. ' Technology Management, Economics and Policy Program, College of Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-742, South Korea. ' Technology Management, Economics and Policy Program, College of Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-742, South Korea. ' Technology Management, Economics and Policy Program, College of Engineering, Seoul National University, 599 Gwanak-ro, Gwanak-gu, Seoul 151-742, South Korea

Abstract: The purpose of this paper is to analyse the factors affecting innovation in a mobile content firm in Korea, with a focus on diversification. We analysed the effect of firm strategy (diversification), capabilities (R&D activity, R&D personnel, marketing capabilities) and characteristics (firm size and age) on innovation. We conducted a detailed analysis on how the extent and direction of diversification influences innovation. For the analysis, we used a negative binomial model with five year panel data adapted from the Data Analysis, Retrieval and Transfer System (DART) database for 41 firms listed in the Korea Mobile Yearbook 2009-2010. The analysis results indicated that the extent of diversification has a negative correlation with innovation, while horizontal diversification has a positive correlation with innovation. Through this study, we draw the policy significance of diversification in relation to the effective fostering and capacity intensification of innovation in the Korean mobile content industry.

Keywords: diversification; innovation factors; product innovation; mobile content; value chain; telecommunications industry; mobile communications; business strategy; firm capabilities; firm characteristics; Korea; R&D activity; R&D personnel; marketing capabilities; firm size; firm age; research and development.

DOI: 10.1504/IJMC.2012.048885

International Journal of Mobile Communications, 2012 Vol.10 No.5, pp.521 - 535

Available online: 09 Aug 2012 *

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