TECHNOLOGICAL OPPORTUNITIES AND FIRMS’ DIVERSIFICATION IN CLIMATE CHANGE MITIGATION TECHNOLOGIES

ABSTRACT This article aims to investigate whether the diversification in climate-change mitigation technologies is affected by changes in technological opportunities at the firm level. From the constitution of a unique database of patents related to climate-change mitigation technologies, this study examines 120 technology groups worldwide and the patent portfolio of 436 firms between 1990 and 2009. The results suggest a non-linear relationship (inverse-U-shape) between the level of technological opportunity and the diversification degree of firms, arguing that the reduction of diversification at a certain point in the curve can be interpreted as a consequence of the limits imposed by the firm’s potential absorptive capacity. Similarly, large companies and those with greater capacity to accumulate knowledge show higher levels of technological diversification.