【Speaker】Dr. Dong HUO, Department of Technology Management for Innovation, University of Tokyo

【Title】When Category-based Indices Meet Non-independent Categories: Solving the Taxonomy Issue in Resource-based Empirical Studies

【Time】Friday, May 23, 10:30-12:00

【Location】Weilun 335

【Language】English

【Organizer】Department of Innovation, Entrepreneurship and Strategy

Abstract

When adopting category-based measures such as the cosine index, Herfindahl index, entropy index, Euclidean distance, and Pearson’s correlation coefficient in empirical studies with respect to the categories of industry or technology, the inherent relatedness between the categories induces a taxonomy issue, as the categories are not naturally inter-independent.

Therefore, category-based indices may fail to produce a valid measurement. To solve this issue, we propose new indices that harness the relatedness information of categories. An example of mathematical constructive proof for the cosine index is given, and the development process provides a rigorous solution framework. The validity is then examined thoroughly, and the results reveal that this approach performs as expected in empirical analyses. Finally, the mathematical interpretation and generality for other category-based indices are discussed.