Backward Dispersion Measures and Out-of-the-Box Inventions

Using a scoring methodology that is a refinement over the Trajtenberg, et al (1997) indices, we found that the financial performance measures of communications services firms having patents which synthesized highly-diverse technological knowledge streams had positively correlated patterns with scores for backward-cited antecedents. Alarmingly, tests of the relationship of Tobin's q measures with the backward-dispersion citation scores indicated that a negative relationship exists — a result which may indicate that investors are not as eager to bet on the rewards of out-of-the box inventions as management is.