IDEAS home Printed from https://ideas.repec.org/p/upf/upfgen/444.html
   My bibliography  Save this paper

External technology sources: Embodied or disembodied technology acquisition

Author

Listed:
  • Bruno Cassiman
  • Reinhilde Veugelers

Abstract

This paper analyzes the choice between different innovation activities of a firm. In particular, we study the technology acquisition decision of the firm, i.e. its technology BUY decision as part of the firm's innovation strategy. We take a closer look at the different types of external technology acquisition where we distinguish two broad types of technology buy decisions. On the one hand, the firm can acquire new technology which is embodied in an asset that is acquired such as new personnel or (parts of) other firms or equipment. On the other hand, the firm can obtain new technology disembodied through a licensing agreement or by outsourcing the technology development from an R&D contractor or consulting agency. Through a series of Probit regressions, we discuss variables that might affect external technology acquisition choices of the firm and pay special attention to the firm's abilities to scan the market for technology and to absorb the technology acquired. Furthermore, we analyze the effect of different appropriation regimes on the decision of the firm to source technology.

Suggested Citation

  • Bruno Cassiman & Reinhilde Veugelers, 2000. "External technology sources: Embodied or disembodied technology acquisition," Economics Working Papers 444, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:444
    as

    Download full text from publisher

    File URL: https://econ-papers.upf.edu/papers/444.pdf
    File Function: Whole Paper
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. David J. TEECE, 2008. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 5, pages 67-87, World Scientific Publishing Co. Pte. Ltd..
    2. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
    3. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    4. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    5. Utterback, James M & Abernathy, William J, 1975. "A dynamic model of process and product innovation," Omega, Elsevier, vol. 3(6), pages 639-656, December.
    6. Michael L. Katz & Carl Shapiro, 1986. "How to License Intangible Property," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(3), pages 567-589.
    7. Veugelers, Reinhilde, 1997. "Internal R & D expenditures and external technology sourcing," Research Policy, Elsevier, vol. 26(3), pages 303-315, October.
    8. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    9. Arora, Ashish & Gambardella, Alfonso, 1994. "Evaluating technological information and utilizing it : Scientific knowledge, technological capability, and external linkages in biotechnology," Journal of Economic Behavior & Organization, Elsevier, vol. 24(1), pages 91-114, June.
    10. Spence, Michael, 1984. "Cost Reduction, Competition, and Industry Performance," Econometrica, Econometric Society, vol. 52(1), pages 101-121, January.
    11. De Bondt, Raymond & Slaets, Patrick & Cassiman, Bruno, 1992. "The degree of spillovers and the number of rivals for maximum effective R &D," International Journal of Industrial Organization, Elsevier, vol. 10(1), pages 35-54, March.
    12. Arora, Ashish & Gambardella, Alfonso, 1990. "Complementarity and External Linkages: The Strategies of the Large Firms in Biotechnology," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 361-379, June.
    13. Granstrand, Ove & Sjolander, Soren, 1990. "The acquisition of technology and small firms by large firms," Journal of Economic Behavior & Organization, Elsevier, vol. 13(3), pages 367-386, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gombau, Verònica & Segarra Blasco, Agustí, 2011. "The Innovation and Imitation Dichotomy in Spanish firms: do absorptive capacity and the technological frontier matter?," Working Papers 2072/179666, Universitat Rovira i Virgili, Department of Economics.
    2. Olfa Kammoun & Mohieddine Rahmouni, 2014. "Appropriation Instruments and Innovation Activities: Evidence from Tunisian Firms," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 11(06), pages 1-22.
    3. Kokshagina, Olga & Le Masson, Pascal & Bories, Florent, 2017. "Fast-connecting search practices: On the role of open innovation intermediary to accelerate the absorptive capacity," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 232-239.
    4. Hyunseok Park & Janghyeok Yoon & Kwangsoo Kim, 2013. "Identification and evaluation of corporations for merger and acquisition strategies using patent information and text mining," Scientometrics, Springer;Akadémiai Kiadó, vol. 97(3), pages 883-909, December.
    5. Arbussa, Anna & Coenders, Germa, 2007. "Innovation activities, use of appropriation instruments and absorptive capacity: Evidence from Spanish firms," Research Policy, Elsevier, vol. 36(10), pages 1545-1558, December.
    6. Iain M. Cockburn & Megan J. MacGarvie & Elisabeth Müller, 2010. "Patent thickets, licensing and innovative performance," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(3), pages 899-925, June.
    7. Silvia Vicente-Oliva & Ángel Martínez-Sánchez & Luis Berges-Muro, 2016. "Enhancing The Outcomes In R&D Collaborative Projects: An Empirical Analysis Of The Middle Ebro Valley In Spain," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(07), pages 1-34, October.
    8. Arbussà, Anna & Coenders, Germà, 2005. "Innovation strategies in the presence of technology markets: evidence from Spanish innovative firms," Working Papers of the Department of Economics, University of Girona 15, Department of Economics, University of Girona.
    9. Alvarez, Roberto & Crespi, Gustavo & Ramos, Joseph, 2002. "The Impact of Licenses on a "Late Starter" LDC: Chile in the 1990s," World Development, Elsevier, vol. 30(8), pages 1445-1460, August.
    10. Gombau, Verònica & Segarra Blasco, Agustí, 2011. "Innovation and absorptive capacity: What is the role of technological frontier?," Working Papers 2072/179622, Universitat Rovira i Virgili, Department of Economics.
    11. Verònica Gombau & Agustí Segarra, 2011. "The Innovation and Imitation Dichotomy in Spanish firms: do absorptive capacity and the technological frontier matter?," Working Papers XREAP2011-22, Xarxa de Referència en Economia Aplicada (XREAP), revised Dec 2011.
    12. Versaevel, Bruno & de Villemeur, Étienne, 2003. "Conflict and Cooperation on R&D Markets," IDEI Working Papers 191, Institut d'Économie Industrielle (IDEI), Toulouse.
    13. Olfa KAMMOUN & Mohieddine RAHMOUNI, 2013. "Intellectual Property Rights, Appropriation Instruments and Innovation Activities: Evidence from Tunisian Firms," Cahiers du GREThA (2007-2019) 2013-01, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    14. Rustem Baris Yesilay & Ilker Murat Ar & Serdal Temel, 2015. "The Relationship Between Direct Government Support for R&D and Patents in Emerging Economies: A Turkish Case Study," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 12(05), pages 1-20.
    15. Mercedes Teruel & Agustí Segarra, 2011. "Productivity and R&D sources in manufacturing and service firms in Catalonia: a regional approach," ERSA conference papers ersa11p1860, European Regional Science Association.
    16. Farshid Mohamadnejad, 2014. "A DEMATEL-Based Framework for Identification of Causalities Among Internal and External Modes of Technology Acquisition," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 11(03), pages 1-13.
    17. Beneito, Pilar, 2003. "Choosing among alternative technological strategies: an empirical analysis of formal sources of innovation," Research Policy, Elsevier, vol. 32(4), pages 693-713, April.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Levin, Mark (Левин, Марк) & Matrosova, K. (Матросова, К.), 2016. "Research, Modeling and Process Management Dissemination of Innovations in Socio-Economic Systems [Исследование, Моделирование И Управление Процессами Распространения Инноваций В Социально-Экономиче," Working Papers 1443, Russian Presidential Academy of National Economy and Public Administration.
    2. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
    3. Bruno Cassiman & Reinhilde Veugelers, 1998. "Complementarity between technology make and buy in innovation strategies: Evidence from Belgiam manufacturing firms," Economics Working Papers 279, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Schmiedeberg, Claudia, 2008. "Complementarities of innovation activities: An empirical analysis of the German manufacturing sector," Research Policy, Elsevier, vol. 37(9), pages 1492-1503, October.
    5. Liza Jabbour & Maria Pluvia Zuniga, 2009. "Drivers of the Offshore Outsourcing of R&D: Empirical Evidence from French Manufacturers," Discussion Papers 09/04, University of Nottingham, GEP.
    6. Arbussa, Anna & Coenders, Germa, 2007. "Innovation activities, use of appropriation instruments and absorptive capacity: Evidence from Spanish firms," Research Policy, Elsevier, vol. 36(10), pages 1545-1558, December.
    7. Claudio A. Piga & Marco Vivarelli, 2004. "Internal and External R&D: A Sample Selection Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(4), pages 457-482, September.
    8. Arbussà, Anna & Coenders, Germà, 2005. "Innovation strategies in the presence of technology markets: evidence from Spanish innovative firms," Working Papers of the Department of Economics, University of Girona 15, Department of Economics, University of Girona.
    9. Kenta Nakamura & Hiroyuki Odagiri, 2005. "R&D boundaries of the firm: An estimation of the double-hurdle model on commissioned R&D, joint R&D, and licensing in Japan," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(7), pages 583-615.
    10. Zuniga, Pluvia & Crespi, Gustavo, 2013. "Innovation strategies and employment in Latin American firms," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 1-17.
    11. Bruno Cassiman & Reinhilde Veugelers, 2006. "In Search of Complementarity in Innovation Strategy: Internal R& D and External Knowledge Acquisition," Management Science, INFORMS, vol. 52(1), pages 68-82, January.
    12. Cassiman, Bruno & Veugelers, Reinhilde, 2007. "Are external technology sourcing strategies substitutes or complements? The case of embodied versus disembodied technology acquisition," IESE Research Papers D/672, IESE Business School.
    13. Veugelers, Reinhilde & Cassiman, Bruno, 2005. "R&D cooperation between firms and universities. Some empirical evidence from Belgian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 355-379, June.
    14. Hagedoorn, John & Wang, Ning, 2012. "Is there complementarity or substitutability between internal and external R&D strategies?," Research Policy, Elsevier, vol. 41(6), pages 1072-1083.
    15. Cassiman, Bruno & Veugelers, Reinhilde, 2002. "Complementarity in the innovation strategy: Internal R&D, external technology acquisition, and cooperation in R&D," IESE Research Papers D/457, IESE Business School.
    16. Veugelers, Reinhilde & Cassiman, Bruno, 2002. "Complementarity in the Innovation Strategy: Internal R&D, External Technology Acquisition and Cooperation," CEPR Discussion Papers 3284, C.E.P.R. Discussion Papers.
    17. Laura Barbieri & Daniela Bragoli & Flavia Cortelezzi & Giovanni Marseguerra, 2015. "Public Support to Innovation Strategies," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1509, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    18. Veugelers, Reinhilde, 1997. "Internal R & D expenditures and external technology sourcing," Research Policy, Elsevier, vol. 26(3), pages 303-315, October.
    19. Rajneesh Narula & Andrea Martínez-Noya, 2014. "International R&D Alliances by Firms: Origins and Development," John H Dunning Centre for International Business Discussion Papers jhd-dp2014-06, Henley Business School, University of Reading.
    20. Becker Wolfgang & Peters Jürgen, 2005. "Innovation Effects of Science-Related Technological Opportunities / Innovationseffekte von technologischen Möglichkeiten aus dem Wissenschaftsbereich: Theoretical Considerations and Empirical Findings," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 225(2), pages 130-150, April.

    More about this item

    Keywords

    Technology acquisition; innovation; appropriability; absorptive capacity;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:upf:upfgen:444. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: http://www.econ.upf.edu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.