The effect of internal and external technology sourcing on firm performance throughout the technology life cycle

Abstract

Due to copyright restrictions, the access to the full text of this article is only available via subscription.In studies about the impact of technology sourcing on firm performance, the impact of the technology life cycle has thus far received scant attention. This paper investigates this topic from the knowledge-based perspective. Data was gathered from 22 PLD (Programmable Logic Device) manufacturers in the integrated circuit industry between 1986 and 2005, and used to test two hypotheses based on panel analysis: (1) that strategic alliance networks, as a mode of external technology sourcing, have a positive effect on a firm's innovative and market performance early in the technology life cycle, and (2) that internal development as a mode of internal technology sourcing has a positive effect on a firm's innovative and market performance later in the technology life cycle. Although both hypotheses are supported as far as market performance is concerned, neither is supported when it comes to innovative performance

The impact of intangibles on firm growth

“…Prior research confirmed a relationship among external intangibles -especially knowledge -innovation and firm performance (Jones, Lanctot, and Teegen 2001;Taylor and Lowe 1997;Tsai and Wang 2007). Nevertheless, some scholars argue that the topic is quite controversial and call for further investigation (Stolwijk et al 2012). Hence, we posit a second research hypothesis as follows: Hypothesis 2: The orientation towards externally generated intangibles is positively associated with firm performance.…”

“…The literature also emphasises the difference between internally and externally generated intangibles (Stolwijk et al 2012). The global economy and turbulent technological evolution have pushed towards the decentralisation of knowledge sourcing, and the diversification of the brand portfolio.…”

“…The literature also investigates whether intangibles are sensitive to organisational conditions, which may enhance or mitigate their effect on performance (Tsai and Wang 2007;Vega-Jurado, Gutierrez-Gracia, and Fernandez-De-Lucio 2009 Impact of intangibles on firm growth 5 which can moderate the relationship between intangibles and performance, such as innovation capability (Gomez and Vargas 2012), technology life cycle (Stolwijk et al 2012), tangible resources and technological slack (Bueno et al 2010), foreign direct investment (Jiang et al 2011), and corporate responsibility (Surroca, Tribo, and Waddock 2010), firm age (Dehlen et al 2014), strategic orientation (Hagen et al 2012;Troilo, De Luca, and Atuahene-Gima 2014), top management traits and behaviour , etc. In particular, the literature highlights the positive role of absorptive capacity, which positively moderates the decision to acquire external intangibles, especially when the motivation to acquire is low, or financial resources are limited (Ruth, Iyer, and Sharp 2013).…”

Technology uncertainty and technology sourcing: case study of biopharmaceuticals in China

“…Radically, new technologies, like biopharmaceutical, are generally sourced by new entrants (Tushman and Rosenkopf, 1992). Literature has indicated that external technology sourcing in earlier technology life cycle has stronger effect (Stolwijk et al, 2012). Our findings further shows that although earlier involvement can bring more benefits it must be evaluated with consideration of entry model.…”

British SMEs’ e-commerce technological investments and firm performance: an RBV perspective

“…A second control variable is firm age, gauged by the years of the target firm's operation in the market. Finally, for SMEs, outsourcing is an important control variable because most SMEs lack competent in-house technical expertise and thus are more likely to outsource IT activities to external consultants (Bruneel et al 2012;Stolwijk et al 2012 Note: N = 430; Age: 1 = < 4 years; 2 = 4-6 years; 3 = 7-9 years; 4 = 10-12 years; 5 = 13-15 years; 6 = 16-18 years; 7 = 19-21 years; 8 = 22-24 years; 9 = > 25 years; Outsourcing: 0 = None; 1 = < 10%; 2 = 10-29%; 3 = 30-49%; 4 = 50-69%; 5 = > 70%.…”