Date of Award

December 2021

Degree Type


Degree Name

Doctor of Philosophy


Management Science

First Advisor

Edward Levitas

Committee Members

Maria Goranova, George Cashman, Tailan Chi


Abnormal Returns, Exploitations, Exploration, Innovation


In his seminal work, March (1991) points to innovation as a key to a firm’s survival. In this dissertation proposal, I seek to build on March’s research by leveraging his construct of balancing a focus on improving existing capabilities (“exploitation”) while simultaneously creating new competencies (“exploration”). These two approaches to innovation are often viewed as requiring a firm to leverage very different skills. Not only are there differing skills, but the level of risk and potential reward also vary based on a firm’s decision to focus on exploration versus exploitation. The reaction of investors to this dichotomy is the focus of my dissertation proposal. While researching this dilemma, Fitzgerald et al. (2021) found that investors often focus on a firm’s explorative initiatives due to the new and unfamiliar natural of these innovations. However, despite this investor focus on exploration, firms concentrating on exploitation tend to experience superior operating results - at least in the short term. Their research goes on to suggest that investor focus on exploration may result in undervaluing firms that focus on exploitation. My study sought to build on their research by exploring two potential moderators (firm size and patent portfolio) and creating several competing hypotheses using Absorptive Capacity as a lens. Utilizing a sample of 3660 patents from 164 unique organizations, empirical results did not find support for the proposed interactions. My study’s approach was unique from Fitzgerald et al. (2021) in several regards. These differences as well as limitations and opportunities for future research are also discussed.