Managerial Attention, Technological Knowledge, and Firm Performance

Boynton, Dylan

doi:https://doi.org/10.21985/n2-5ycv-pt74

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Managerial Attention, Technological Knowledge, and Firm Performance

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Knowledge combination is a fundamental component of technological invention, which is a driver of new economic opportunities and firm growth. Yet, evidence suggests that myriad organizational factors, including managers, weigh heavily on the ability of firms to productively use R&D capabilities. This dissertation argues that managerial attention plays an important role in explaining how firms derive value from knowledge combination and innovation. Attention—characterized by the selective application of time and focus of managers—shapes how firms view their environment, understand potential applications for new resources, and formulate strategy. To unpack the relationship between managerial attention and a firm’s technological resources derived from knowledge combination, the theoretical foundations of this dissertation are motivated by integrating the elements of the attention-based view with Edith Penrose’s theory on the growth of the firm. In Chapter 1, I consider the interplay between the temporal focus of managerial attention and a firm’s pattern of technological search. I find support for hypotheses predicting a significant impact on levels of firm growth. In Chapter 2, I examine the external-facing role of attention as a signal to investors, and how the communication of managers interacts with a firm’s observable pattern of technological search to influence how a firm’s technologies are valued by those investors, finding empirical support for my hypothesis that alignment between managerial attention and a firm’s technological search is positively associated with the valuation of that firm’s new technology. Chapter 3 has two objectives which aim to expand on the insights offered in the first two chapters. I craft a modest theoretical comparison of Penrose’s theory related to profitable growth with the attention-based view of the firm and extend the empirical analysis of Chapter 1 and Chapter 2 to further test the relationship between attention and knowledge combination.

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