External technology acquisition: a double-edged sword

Abstract

Firms are known to actively utilise external technology acquisition to update and extend their technological knowledge base. Although external technology acquisition has various advantages, it should be considered as a double-edged sword as it also has some inherent negative aspects. This study examines the role of external technology acquisition to investigate whether external technology acquisition is complementary or substitutive to internal R&D activities in creating innovation. The results show that external technology acquisition has an inverted U-shaped relationship with subsequent technology innovation performance, and that is not complementary to internal R&D activities. We thus confirm that external technology acquisition has to be seen as a double-edged sword and that managers need to be aware of the potentially negative effects of strong diversity of the firm's external technology acquisition sources on internal R&D and subsequent innovation performance.

Non‐R&D innovation and firms’ new product performance: the joint moderating effect of R&D intensity and network embeddedness

“…Second, a firm’s ability to imitate new product innovations provides the foundation for subsequent applications (Cohen and Levinthal, ). Third, technology adoption can not only help firms overcome the limitations of internal resources and capabilities but can also provide flexibility in strategic decision‐making for technology development (Kang et al, ). Fourth, innovative marketing activities, like changes in product design, branding, or online innovation communities, are also gradually taking center stage in business, contributing to product innovation performance (Guo et al, ).…”

Is high-quality knowledge always beneficial? Knowledge overlap and innovation performance in technological mergers and acquisitions

“…According to Phene, Tallman, and Almeida (2012), the knowledge overlap between the acquirer firm and the target firm enables engineers to share a common mindset, to bring about similarity in organizational systems and processes and to facilitate the absorption of knowledge. Consequently, even if the amount of knowledge that the acquirer firm needs to integrate increases, efficient knowledge transfer is possible as long as the acquirer firm possesses sufficient absorptive capacity as a result of overlapping knowledge with the target firm (Kang, Jo, & Kang, 2015).…”

The effects of internal technological diversity and external uncertainty on technological alliance portfolio diversity

“…In other words, firms access and use internal knowledge, which it created through its own R&D activities as well as the externally sourced knowledge of its partners. While previous literature has not come to an agreement on whether the relationship between internal R&D and external knowledge sourcing is substitutive (Kang, Jo, and Kang 2015;Laursen and Salter 2006) or complementary (Cassiman and Veugelers 2006;Grimpe and Kaiser 2010), the relationship between the internal knowledge base and external knowledge has been previously investigated in the context of alliances. Among the previous studies that have investigated characteristics of the firm's internal knowledge base and alliance portfolios, a number of studies have focused on the breadth and diversity aspects (e.g.…”