China Insitute for Small and Medium Enterprises, Zhejiang U. of Technology
High-technology firms have increasingly adopted heterogeneous patent-portfolio strategies to establish competitive advantage in the marketplace. The signaling role of patent-portfolio size and its impact on a firm’s market value has been well established in the literature. The structural characteristics of patent portfolios and the effects of a signaling environment under uncertainty have, however, received little attention. Bridging the patent-portfolio literature with signaling theory, we find that heterogeneity in patented technologies and patent quality negatively moderates the impact of patent-portfolio size on a firm’s market value, based on data from publicly listed firms operating in China’s high-technology industries. The proposed effects depend on market dynamics, as market uncertainty weakens the moderating effects of technology heterogeneity but enhances those of quality heterogeneity. This study generates both theoretical and managerial implications for improving signaling outcomes with heterogeneous patent portfolios.