Technology sourcing and output of established firms in a regime of encompassing technological change
Article first published online: 22 MAY 2003
Copyright © 2003 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 24, Issue 7, pages 651–666, July 2003
How to Cite
Nicholls-Nixon, C. L. and Woo, C. Y. (2003), Technology sourcing and output of established firms in a regime of encompassing technological change. Strat. Mgmt. J., 24: 651–666. doi: 10.1002/smj.329
- Issue published online: 22 MAY 2003
- Article first published online: 22 MAY 2003
- Manuscript Revised: 5 FEB 2003
- Manuscript Received: 5 MAY 1999
- technology sourcing;
- absorptive capacity;
- technological change;
This paper argues that when the technological basis of an industry is changing, the firm's approach to technology sourcing plays a critical role in building the capabilities needed to generate new technical outputs. Using survey and archival data from the U.S. pharmaceutical industry during the period 1981–91, we find that different approaches to technology sourcing (internal R&D and external R&D) are related to different types of biotechnology-based output at the end of the period. Internal R&D was positively associated with patent output. Acquisition activity was positively related to number of biotechnology-based products. Greater use of R&D contracts and licenses was associated with stronger reputation for possessing expertise in biotechnology. These findings underscore the importance of taking a multifaceted approach to technology sourcing in order to build the absorptive capacity needed to generate new technical output. Surprisingly, we also found that involvement in joint ventures was negatively related to patent output. This raises interesting questions about the strategic use of joint ventures in a regime of encompassing technological change. Copyright © 2003 John Wiley & Sons, Ltd.