The effects of related and unrelated technological diversification on innovation performance and corporate growth in the Taiwan's semiconductor industry

This study uses the entropy-based patent measure to discuss the effects of related technological diversification (RTD) and unrelated technological diversification (UTD) on innovation performance and corporate growth. The results indicate that RTD has a monotonically positive influence on both of innovation performance and corporate growth and UTD has an inverse U-shaped influence on both of them. Furthermore, the results show that the extent of the positive effect of RTD on innovation performance and corporate growth is better than that of UTD on both of them. If Taiwan's semiconductor companies would like to undertake technological diversification, this study suggests that they should adopt RTD, rather than UTD. Besides, this study points out that innovation performance mediates the relationship between corporate growth and both of RTD and UTD. It demonstrates that RTD and UTD can directly affect corporate growth or indirectly influence it via innovation performance.