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Balancing Internal and External Knowledge Acquisition: The Gains and Pains from R&D Outsourcing

Published on Dec 1, 2010in Journal of Management Studies 5.84
· DOI :10.1111/j.1467-6486.2010.00946.x
Christoph Grimpe17
Estimated H-index: 17
Ulrich Kaiser18
Estimated H-index: 18
(UZH: University of Zurich)
The outsourcing of research and development (R&D) activities has frequently been characterized as an important instrument to acquire external technological knowledge that is subsequently integrated into a firm's own knowledge base. However, in this paper we argue that these ‘gains’ from R&D outsourcing need to be balanced against the ‘pains’ that stem from a dilution of firm-specific resources, the deterioration of integrative capabilities and the high demands on management attention. Based on a panel dataset of innovating firms in Germany, we find evidence for an inverse U-shaped relationship between R&D outsourcing and innovation performance. This relationship is positively moderated by the extent to which firms engage in internal R&D and by the breadth of formal R&D collaborations: both serve as an instrument to increase the effectiveness of R&D outsourcing.
  • References (99)
  • Citations (273)
Published on Dec 1, 2010in Journal of Management Studies 5.84
Susan M. Mudambi17
Estimated H-index: 17
(TU: Temple University),
Stephen Tallman25
Estimated H-index: 25
(UR: University of Richmond)
Outsourcing knowledge and innovation activities offer cost savings and superior performance, but can also put a firm's unique resources and capabilities at risk. Characterizations of outsourcing as a make-or-buy decision do not fit well with decisions on knowledge process outsourcing (KPO). KPO is a make-or-ally decision, as firms seek a governance structure that will both protect and leverage their strategic knowledge assets, with the final decision often coming down to a choice between differe...
Published on Jan 1, 2010in Journal of Management Studies 5.84
Mehmet Demirbag25
Estimated H-index: 25
(University of Sheffield),
Keith W. Glaister31
Estimated H-index: 31
(University of Sheffield)
This paper examines empirically the determinants of offshore location choice between country clusters. Based on a dataset of 1722 R&D projects by MNEs located in developed and emerging countries, we examine the impact of home and host country, industry, and firm level variables on choice of location. We draw on the extended OLI paradigm to develop our hypotheses. Using the EU15 as a base group, a multinomial logit model is estimated between the regions of USA&Canada, Eastern Europe&Russia, emerg...
Published on Dec 1, 2009in Strategic Management Journal 5.57
Heli Wang18
Estimated H-index: 18
(HKUST: Hong Kong University of Science and Technology),
Jinyu He9
Estimated H-index: 9
(HKUST: Hong Kong University of Science and Technology),
Joseph T. Mahoney40
Estimated H-index: 40
(UIUC: University of Illinois at Urbana–Champaign)
The resource-based view of the firm emphasizes the role of firm-specific resources, especially firm-specific knowledge resources, for enabling a firm to gain and sustain competitive advantage. However, since the deployment of firm-specific knowledge frequently requires key employees to make specialized human capital investments that are not easily transferable to other settings, employees with foresight may be reluctant to make these specialized investments. This paper explores both economic- an...
Published on Dec 1, 2009in Strategic Management Journal 5.57
Douglas W. Vorhies10
Estimated H-index: 10
(University of Mississippi),
Robert E. Morgan31
Estimated H-index: 31
(Cardiff University),
Chad W. Autry29
Estimated H-index: 29
(Oklahoma City University)
We report on two studies (a single and a multi‐industry) that empirically investigate a nomological network of relationships between strategic business unit product‐market strategy (differentiation, cost‐focus, and product‐market scope), marketing capabilities (architectural and specialized capabilities, as well as their integration), and business unit performance (market effectiveness and subsequent one‐year objective cash flow), along with a series of controls. Addressing important lacunae in ...
Published on Jun 1, 2009in Strategic Management Journal 5.57
Carmen Weigelt7
Estimated H-index: 7
(Tulane University)
Outsourcing plays an important role for firms adopting new technologies. Although outsourcing provides access to a new technology, it does not guarantee that a firm can subsequently integrate the technology with existing business processes and leverage it in the marketplace. This distinction, however, has rarely been made in the literature. In the context of business process enhancing technologies, this study builds on the resource-based and knowledge-based views to study the impact of outsourci...
Published on Jul 1, 2008in Research Policy 5.42
Bruce Tether24
Estimated H-index: 24
(Imperial College London),
Abdelouahid Tajar28
Estimated H-index: 28
(University of Manchester)
This paper explores the use of specialist knowledge providers as sources of information in the innovation activities of manufacturing and service firms. Specialist knowledge providers are consultancies, private research organisations and the public science-base (i.e., universities and the government research laboratories). These may be engaged by firms in co-operative arrangement for innovation or as informal sources of information. We find, as anticipated, that amongst other factors specialist ...
Published on Jun 1, 2008in Oxford Bulletin of Economics and Statistics 0.99
Boris Lokshina19
Estimated H-index: 19
Rene Belderbos30
Estimated H-index: 30
(TU/e: Eindhoven University of Technology),
Martin Carree35
Estimated H-index: 35
We examine the impact of internal and external R&D on labor productivity in a 6-year panel of Dutch manufacturing firms. We apply a dynamic linear panel data model that allows for decreasing or increasing returns to scale in internal and external R&D and for economies of scope. We find complementarity between internal and external R&D, with a positive impact of external R&D only evident in case of sufficient internal R&D. These findings confirm the role of internal R&D in enhancing absorptive ca...
Published on Oct 1, 2007in Strategic Management Journal 5.57
Prashant Kale17
Estimated H-index: 17
(UM: University of Michigan),
Harbir Singh42
Estimated H-index: 42
(UPenn: University of Pennsylvania)
In recent years, academics and managers have been very interested in understanding how firms develop alliance capability and have greater alliance success. In this paper, we show that an alliance learning process that involves articulation, codification, sharing, and internalization of alliance management know-how is positively related to a firm's overall alliance success. Prior research has found that firms with a dedicated alliance function, which oversees and coordinates a firm's overall alli...
Published on Jul 10, 2007in Journal of Modelling in Management
Wayne S. DeSarbo35
Estimated H-index: 35
(PSU: Pennsylvania State University),
C. Anthony Di Benedetto36
Estimated H-index: 36
(TU: Temple University),
Michael Song29
Estimated H-index: 29
The resource-based view (RBV) of the firm has gained much attention in recent years as a means to understand how a strategic business unit obtains a sustainable competitive advantage. In this framework, several research studies have explored the relationships between resources/capabilities and firm performance. This paper seeks to extend this line of research by explicitly modeling the heterogeneity of such relations across firms in various different industries in exploring the interrelationship...
Cited By273
Tomi Laamanen14
Estimated H-index: 14
(HSG: University of St. Gallen)
While the usefulness of the attention-based view in understanding the role of headquarters-subsidiary relationships in multinational companies (MNC) is well established, recent research on corporate headquarters (CHQ) has moved beyond the simplistic conception of CHQ as a unitary entity. In this point of view, I review the development of the attention-based view and its use in research on CHQs in MNCs. Developing a better understanding of the dynamics of attention between the different subsidiar...
Published on Oct 1, 2019in European Journal of Operational Research 3.81
Ji Young Lee16
Estimated H-index: 16
(Hanyang University),
Chulyeon Kim1
Estimated H-index: 1
(Hanyang University),
Gyunghyun Choi6
Estimated H-index: 6
(Hanyang University)
Abstract In this research, we focus on the collaboration efficiency that arises from the research and development (RD however, only a few focus on the efficiency. Thus, this study investigates the effect of collaboration and collaboration type in terms of innovation efficiency for SMEs. First, we evaluate and compare the innovation efficiency of collaboration by applying data envelopment analysis-based global Malmquist productivity analysis. Then, we characterized the collaboration typology thro...
Published on Sep 1, 2019in Research Policy 5.42
Enrico Vanino1
Estimated H-index: 1
(LSE: London School of Economics and Political Science),
Stephen Roper35
Estimated H-index: 35
(Warw.: University of Warwick),
Bettina Becker9
Estimated H-index: 9
(Aston University)
UK Research Councils (UKRCs) spend around £3bn pa supporting R&D and innovation. We provide a comprehensive assessment of these grants on the performance of participating UK firms, using data on all projects funded by UKRCs over the 2004–2016 period and applying a propensity score matching approach. We exploit the richness of the data available in the Gateway to Research database by investigating the heterogeneous effect of these projects across several novel directions which have not been explo...
Published on Sep 3, 2018in Review of Industrial Organization 0.73
Damián Tojeiro-Rivero (University of Barcelona), Rosina Moreno17
Estimated H-index: 17
(University of Barcelona),
Erika Raquel Badillo5
Estimated H-index: 5
This paper explores R&D offshoring’s role in radical product innovations. These innovations are important for companies’ growth strategies, and we check the extent to which companies rely on external sources, which may bring knowledge that differs significantly from that already present internally. The evidence for Spanish firms between 2004 and 2013 shows that R&D offshoring influences significantly the intensity of radical but not of incremental innovations. This influence is apparently smalle...
Marina Papanastassiou16
Estimated H-index: 16
(Middlesex University),
Robert Pearce23
Estimated H-index: 23
(University of Reading),
Antonello Zanfei20
Estimated H-index: 20
(University of Urbino)
Internationalization of R&D and innovation by multinational enterprises (MNEs) has undergone a gradual and comprehensive change in perspective over the past 50 years. From sporadic works in the late 1950s and in the 1960s, it became a systematically analyzed topic in the 1970s, starting with pioneering reports and “foundation texts”. Our review unfolds the theoretical and empirical evolution of the literature from dyadic interpretations of centralization versus decentralization of R&D by MNEs to...
Published on Nov 19, 2018in Economics of Innovation and New Technology
Dragana Radicic4
Estimated H-index: 4
(IBS: International Business School, Germany),
Merima Balavac1
Estimated H-index: 1
(University of Sarajevo),
Merima Balavac2
Estimated H-index: 2
(University of Sarajevo)
ABSTRACTThis study explores the nature of relationship between in-house R&D, external R&D and cooperation breadth and their joint impact on patent counts as well as technological, product and process, innovations in Spanish manufacturing firms. With regards to patent counts, empirical findings from a Generalized Method of Moments (GMM) estimator suggest a complementarity effect of internal and external R&D activities conditional on the breadth of R&D cooperation. Concerning technological innovat...
Published on Apr 23, 2019in Industry and higher education
Kohei Nishikawa2
Estimated H-index: 2
(Setsunan University),
Daisuke Kanama (Kanazawa University)
To deal with uncertainties, firms have adopted a ‘parallel path’ strategy in which they apply research and development outcomes to a variety of objectives in innovation activities. Considering anot...
Published on Dec 1, 2018in Journal of Business Research 4.03
Bartolomé Marco Lajara10
Estimated H-index: 10
(University of Alicante),
Enrique Claver-Cortés37
Estimated H-index: 37
(University of Alicante)
+ 2 AuthorsPatrocinio Zaragoza-Sáez8
Estimated H-index: 8
(University of Alicante)
Abstract This paper analyzes the role played by internal knowledge generation and external knowledge acquisition in the impact of agglomeration on the profitability of Spanish hotels. The results are of interest not only because they demonstrate that knowledge management strategies have a partial mediation effect in the relationship between agglomeration and profitability, but also because they find a substitution effect between internal knowledge generation and external knowledge acquisition. T...
Sverre J. Herstad14
Estimated H-index: 14
(University of Oslo),
Tore Sandven2
Estimated H-index: 2
This paper considers in detail how different types of innovation (products, processes, patents, combinations) are related to different employment growth characteristics (exit or survival, with employment upscaling or downscaling at moderate or high rates). Using Norwegian Community Innovation Survey (CIS) data collected in 2008 and merged with public employer-employee registers for the years 2004–2010, it finds that growth persists over time, and increases the probability that ‘bundles’ of compl...