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Calculating the technology base of a firm is a critical first step in studies of the technology strategies of a single entity and in making comparisons between the technology strategies of firms. For example, many studies of alliances and alliance portfolios require calculation of the technology distance or technology overlap between firm dyads. These studies typically use the patents of each partner dyad as the bases for the calculation. This paper introduces a new method of calculating a measure of technology overlap using the patent citations made in the patent applications. Each patent application lists the patented technologies that are being cited, much like citations in an academic paper. Use of various distance calculations using patents and the use of patent citations to evaluate technology direction are accepted concepts in the literature. This paper combines and advances these ideas by using patent citations in the distance calculation. By examining patent citations, we calculate technology distance of a dyad at a broader and deeper level than would be available by looking only at the patents themselves. The paper first examines the current techniques for calculating technology overlap and summarizes some of the current applications. Then, the new calculation technique is derived and examples of the calculation are presented. Finally, areas for further research are explored.

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