Patent productivity: Strategic human resources and the attention-based view

Abstract

Scholars have argued that choices about a firm’s human resources are critical to innovation and, in turn, firm success. However, studies of the role human resources (HR) in innovation have tended to focus on the individual level. Yet, broader strategic choices about HR can also impact innovation, and specifically the patent productivity of the firm. Here we draw on the attention-based view to guide the examination of three key concerns for strategic HR management by the top management team (TMT), and the relationship of these variables with patent productivity. We specifically examine TMT rhetoric, presence of an HR executive on the TMT, and HR slack. Our examination shows that the innovation rhetoric of the TMT can be beneficial to patent productivity, while HR slack detracts from patent productivity. Looking deeper we find limited support for the notion that time lags positively moderate the influence of innovation rhetoric and the HR executive effect on patent productivity.

Keywords:

• Patent productivity
• innovation rhetoric
• human resource executive effect
• human resource slack

Acknowledgements

The authors would like to acknowledge the contribution of Jane Mackay and the advice of Brad Harris, Mike Hitt, Phil Kauffman, and Richard Priem. We also acknowledge the assistance of Mia Dinh, Liz Greer, Trang Nguyen, Lisa O’Brien, Steve Sherwood, Maria Tran, and Aiden Walsh.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data are available at the following DOI: https://doi.org/10.18776/tcu/data/51044. Proprietary data that were obtained via subscription or purchase are not included.

Notes

1 Some scholars have examined HR slack and innovation in the context of downsizing (Mellahi & Wilkinson, 2010a). But beyond analysis of such crises for firms or analysis that relies on subjective measures (Nohria & Gulati, 1996), researchers’ understanding remains limited.

2 We used 2007 as the sample year for the S&P 500 list of firms and the independent variables in order to allow lags in the award of patents from 2010 through 2013. The beginning (peak) of the great recession was December 2007 and the end (trough) was June 2009 (National Bureau of Economic Research, 2018). There is only one month of recession overlap with the 2007 data and there are no overlaps with the years for the lagged patents.

3 Representation of HR executives may be understated where few functional titles are listed. We employed a strict approach by coding observations as non-missing if there was any specificity even though it may have been group, region, and so on. When the CFO was also the treasurer (same person) we treated the firm as non-missing even though other titles were not specific.

4 It may be argued that this relative measure of HR slack is no less precise than commonly used measures of organizational slack that employ equity/debt ratios (Li et al., 2013).

5 In a few cases the parent company changed its headquarters from the U.S. to another country. For example, Medtronic Inc. changed to Medtronic, PLC and claimed Dublin, Ireland as its headquarters. Searches on the EDGAR database using the Medtronic (MDT) ticker in June 2016 produced only one 10-K report for Medtronic PLC, one that was filed in June 2015. Accordingly, although we relied on data from Compustat for the definition of the S&P 500 (and the corresponding MDT ticker designating Medtronic PLC), we used Medtronic Inc. for 10-K reports to identify the patents of the parent and subsidiaries for both 2007 and 2013. A few pharmaceutical firms were reorganized (perhaps for tax purposes) making it problematic to track the firms.

6 Key words were developed from our search of the USPTO files for subsidiaries. We observed entities that had a derivative name, e.g. the parent’s name combined with “intellectual property” or “technologies”. But some of these firms were not listed in the firm’s 10-K Exhibit 21. Follow-up searches identified them as entities owned by the parent firms. For example, AT&T used AT&T Intellectual Property I and AT&T Intellectual Property II to secure its patents but did not list these in its 10-K Form as subsidiaries. In 2013 there were zero patents listed for the AT&T parent firm in the USPTO database while there were 1,367 patents listed for AT&T Intellectual Property I and II. Neither of these was reported on AT&T’s 10-K as a (significant) subsidiary. Similarly, there were 40 patents recorded in the USPTO database for Ford Global Technologies Inc. in 2013 although this subsidiary was not reported on Ford’s 10-K for 2013.

7 When we searched for intellectual property holding companies not listed on the firm’s 10-K forms, we only searched for the parent firms in combination with the key words noted. As such if the parent firm did not identify the entity with its name, such holding companies were not identified and any patents were not included.