Studies on innovation are attracting a lot of researchers’ attention all over the world due to its crucial role in today's competitive world. In our paper we made an attempt to find the?nature of the relationship between technological diversity and innovation performance. We have collected the data for 59 firms from China's automobile industry, from the State Intellectual Property Office of the People's?Republic of China. Then we?used the Negative binomial regression?to test the hypothesis with?four models. We found that correlation between technological diversity and innovation performance has an inverse U-shape form. Keywords: diversification, patents, specialization
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