Match!

Complements or Substitutes? Internal Technological Strength, Competitor Alliance Participation, and Innovation Development

Published on Jul 1, 2013in Journal of Product Innovation Management3.78
· DOI :10.1111/jpim.12014
Shichun Xu6
Estimated H-index: 6
,
Fang Wu1
Estimated H-index: 1
,
Erin Cavusgil16
Estimated H-index: 16
Cite
Abstract
While a firm can choose to develop an innovation internally or externally, the internal knowledge development and external knowledge acquisition tend to interact with each other in the innovation process. The present study examines whether internal technological strength and external competitor alliance participation serve as complements or substitutes in innovation development. Built on the knowledge-based view, this study offers a contingency perspective on the nature of knowledge integration between internal technological strength and external alliance relationships, and how they jointly influence radical and incremental innovation differently. Adopting a random effect negative binomial model specification, a panel data set of 64 pharmaceutical firms over a 15-year period were used to test the hypothesized effects. The findings indicate that internal technological knowledge strength has an inverted U-shaped relationship with radical and incremental innovation. More importantly, the findings also demonstrate that the combined effect of internal and external sources of innovation can have differential effects on radical and incremental innovation development. Specifically, competitor alliance participation strengthens the effect of internal technological strength on incremental product innovation while it weakens the above effect on radical product innovation. This suggests that internal and external sources of innovation may complement each other for incremental innovation while they may represent trade-offs for radical innovation development. The above findings provide empirical evidence for the complexity of pursuing organizational ambidexterity in innovation generation and highlight the importance of balancing the internal and external knowledge sources in pursuing innovation.
  • References (60)
  • Citations (24)
Cite
References60
Newest
#1Frank T. Rothaermel (Georgia Institute of Technology)H-Index: 27
#2Maria Tereza Alexandre (UIUC: University of Illinois at Urbana–Champaign)H-Index: 4
#1Marianna Makri (UM: University of Miami)H-Index: 12
#2Michael A. Hitt (A&M: Texas A&M University)H-Index: 95
Last.Peter J. Lane (UNH: University of New Hampshire)H-Index: 15
view all 3 authors...
#1Don O'Sullivan (Melbourne Business School)H-Index: 9
#2Andrew V. Abela (CUA: The Catholic University of America)H-Index: 8
#1Xueming Luo (TU: Temple University)H-Index: 35
#2Aric Rindfleisch (UW: University of Wisconsin-Madison)H-Index: 25
Last.David K. Tse (HKU: University of Hong Kong)H-Index: 19
view all 3 authors...
Cited By24
Newest
#1Wei Jiang (Ha Tai: Xiamen University)H-Index: 2
#2Felix Tinoziva Mavondo (Monash University, Clayton campus)H-Index: 30
Last.Weihong Zhao (Jiangxi Normal University)
view all 3 authors...
#1Wan Lin Hsieh (THU: Tunghai University)H-Index: 1
#2Panagiotis Ganotakis (University of Liverpool)H-Index: 1
Last.Chengqi Wang (University of Nottingham)H-Index: 21
view all 4 authors...
#1Richard CalviH-Index: 2
#2Thomas Johnsen (Polytechnic University of Milan)H-Index: 21
Last.Katia Picaud BelloH-Index: 1
view all 3 authors...
#1Zhi Yang (Hunan University)H-Index: 3
#2Zhihui Huang (Hunan University)H-Index: 1
Last.Chujian Feng (Ministry of Science and Technology)H-Index: 1
view all 4 authors...
View next paperOpen for innovation: the role of openness in explaining innovation performance among U.K. manufacturing firms