The Role of Technological Rarity and Environmental Uncertainty in Explaining Patent Value

It is well known that knowledge circulates and diffuses in an industry through spillover mechanisms. Building on the insights offered by the Resource Based View that only rare and inimitable resources contribute to value we study how rarity to the market affects innovation value. Furthermore we explore how environmental uncertainty affects innovation value, and whether environmental uncertainty has a moderating effect on the relation between rarity and innovation value. We take as our empirical case hydrocracking, a mature technology widely applied in the oil industry. Innovations in hydrocracking are based on the combination of elementary technologies relative to three technology areas: feeds and products, catalyst preparation, and refinery processing.Using detailed patent information, we find that rarity has a curvilinear effect in an U-shape on innovation value, that environmental uncertainty has an inverted U-shaped curvilinear effect on innovation value, and that low environmental uncertainty moderates the relation between rarity and innovation value in such a way that the U-shaped relation between rarity and value becomes an inverted U-shape.