Technological Diversity and Future Product Diversity in the Drug Industry Volume 3 Jena Economic Research Papers 2009-05-05 2009 2007 2009-031 Product diversity technological diversity product relatedness technological relatedness coherence This paper deals with the topic of related R&D and innovation strategies of large firms. We ask what determines the diversity of a firm’s product portfolio. More specifically, we try to explain large firms’ expansion into new product markets driven by the characteristics of their technological knowledge. Empirically, we study firms in the pharmaceutical and biotech industries, using relevant data on product development and technological knowledge. We find a positive relationship between the diversity of a firm’s future product portfolio and the diversity of its stock of technological knowledge. This relationship becomes weaker when the breadth of technological knowledge increases. jportal_jpjournal_00000016 2009-05-05T06:51:07.977Z 2010-12-17T11:54:00.260Z