Firm Matching in the Market for Technology: Harnessing Creative Destruction

Arque-Castells, Pere; Spulber, Daniel F.

doi:10.5465/ambpp.2020.19790abstract

Cited by 1 publication

(2 citation statements)

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“…An increase in a firm's R&D outsourcing can lead to greater firm innovativeness. However, it also involves some costs and risks (Grimpe & Kaiser, 2010), holdup problems and business stealing among them (Arqué‐Castells & Spulber, 2019b). This study empirically examines whether there are asymmetric cross‐effects between national and international R&D outsourcing to generate technological innovations, and also whether managerial and organizational changes can play a role for the strategic outsourcing decisions.…”

Section: Discussionmentioning

confidence: 99%

“…As companies grow and become more globalized, companies might decide to import R&D from foreign providers 2. This is a risky and costly strategy for the firm because outsourcing from foreign providers implies important organizational changes to instruct and monitor the foreign suppliers (Castellani & Pieri, 2013; Federico, 2010; Grossman & Rossi‐Hansberg, 2012), to integrate foreign knowledge and, as Property Right Theory (PRT) suggests, to avoid potential holdup problems (Azoulay, 2004; Ulset, 1996; Wadhwa et al, 2017) and business stealing effects (Arqué‐Castells & Spulber, 2019b).…”

Section: Introductionmentioning

confidence: 99%

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Organization of R&D outsourcing: Asymmetric cross‐effects between locations

García‐Vega

Huergo

2021

Economics Manag Strategy

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When companies acquire R&D from external national providers, would they benefit if they also acquired knowledge from foreign providers? And the other way around? These questions are important for the organization of firm knowledge‐based activies and R&D governance. In this paper, we try to answer these questions by empirically examining the cross‐effects of international and national R&D outsourcing to generate innovation. Using a panel database of about 10,000 Spanish firms, we show that there is asymmetry in the effectiveness of the combined adoption of R&D outsourcing locations: international R&D outsourcing reinforces national R&D outsourcing, but national outsourcing does not reinforce international outsourcing. Therefore, the order of adoption matters; that is, on average, companies are more innovative if they acquire R&D first from external domestic providers and afterwards from foreign providers. We also find that the mechanism for these effects is related to organizational and management changes in sharing responsibilities and decision‐making.

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Section: Discussionmentioning

confidence: 99%