Is foreign technology acquisition to complement or substitute for internal technology development? A case of manufacturing enterprises in Vietnam

Abstract

Purpose This paper aims to examine whether foreign technology acquisition is complementary to internal technology development in the context of a developing country. Design/methodology/approach The selection model developed by Heckman (1979) was applied with the balanced panel data of manufacturing enterprises from the Annual Enterprise and Technology Surveys from 2012 to 2016 conducted by the Vietnamese General Statistics Organization. Findings The results indicate that foreign technology acquisition and internal technology development are complementary innovation options. Particularly, the number of patents granted for manufacturing enterprises positively affects the probability that enterprises acquire foreign technologies. This effect is stronger in cases of high-tech industries than in cases of low-tech industries. Research limitations/implications Regarding the relationship between internal technology development and foreign technology acquisition, the findings suggest that adoption of foreign technology acquisition and priority in budget allocation for foreign technology acquisition are different in nature and that budget allocation is a more complex issue and may depend on other factors. Practical implications For developing countries, governments should adopt policies supporting domestic enterprises in acquiring technologies from advanced countries that could complement the locally developed technologies. These supports should focus on the high-tech or high-innovation rate industries. Originality/value In the context of a developing economy, the complementary effect of internal technology development and foreign technology acquisition is stronger in cases of the high-tech industries than in cases of the low-tech industries.

Esfuerzos De Innovación Endógenos Y Exógenos, Innovación Y Productividad en Las Empresas Privadas Del Ecuador

“…Encuentran que existen estrategias internas o externas específicas que se adaptan para el logro de diferentes productos de innovación, lo que implica que fomentar una sola estrategia puede ser contraproducente. Resultados similares se pueden encontrar en Badir et al (2020), Giacomarra et al (2021) y Nguyen et al (2021), quienes sugieren que una estrategia de innovación complementaria aumenta la capacidad de alcanzar innovaciones en economías emergentes. En contraste, Phung et al (2021) encuentra que las diferentes estrategias en innovación son sustitutos y que la estrategia endógena es más beneficiosa para la innovación.…”

The effect of innovation efficiency management on performance: Differences according to organizational size

“…However, this paper does not consider the effect of developing an internal R&D expenditure or an external R&D expenditure. However, this decision is more complex, as there is a need to determine the right combination of internal technology development and external technology acquisition (Nguyen, Dang, et al, 2021).…”

“…From the perspective of efficiency, companies must achieve the highest possible volume of outputs from a given set of inputs. Although this approach has been present in the study of innovation (Cruz‐Cázares et al, 2013; Manzaneque et al, 2018; Martínez‐Alonso et al, 2020), it is also true that on many occasions this innovation management has been observed either from the point of view of inputs (Nguyen, Dang, et al, 2021) or from outputs (Boronat‐Navarro et al, 2021). However, we can see such a process from an ambidexterity perspective, this is combining inputs and outputs policies simultaneously.…”

“…On the one hand, companies have to decide where to spend the limited resources at their disposal. Firms must decide whether to invest in the internal development and control of the innovation process, or whether to accelerate the innovation process through external acquisition of all or part of the results (Asimakopoulos et al, 2020; Boronat‐Navarro et al, 2021; Nguyen, Dang, et al, 2021), but at the same time, they must decide whether to base profitability on the continuous renovation of products and processes (Geroski, 1989), or whether to maximize profitability and exercise some control over the product rollover (Li & Yang, 2020).…”

“…Wang et al (2021) propose that internal expenditures in R&D can create a competitive advantage for a firm (Cassiman & Veugelers, 2006), but innovative firms also require technology or knowledge from external sources when developing their innovations. Thus, performance depends on the alignment of the company's internal experience and external sources of innovation (Nguyen, Dang, et al, 2021) as a guarantee of success (Hansen, 2001), based on its learning processes and the development of its organizational competencies (Thomä & Zimmermann, 2020). This alignment or equilibrium is based on the combination, integration and acquisition of knowledge from internal and external sources, which can guarantee the generation of R&D (Hervás‐Oliver et al, 2021; Medda, 2020; Thomä & Zimmermann, 2020) since overexposure to any of them can lead to worse results than those that could be obtained with an optimal combination (Ceptureanu et al, 2021; Grimpe & Kaiser, 2010).…”