Seminar by Szabolcs Sebrek, Departamento Economia de la Empresa, Universidad Carlos III de Madrid

COLLOCATING EXTERNAL TECHNOLOGY SEARCH VIS-À-VIS RIVALS: THE ROLE OF UPSTREAM CAPABILITIES, EXTENSIVENESS OF PRODUCT PORTFOLIO AND DOWNSTREAM ASSETS

Abstract

Previous literature declares the importance of external technology search (ETS) for firms competitiveness, especially in case of technology intensive industries. What is also emphasized that firms may geographically disperse ETS from competitors to minimize competition costs from unwanted outward knowledge spillovers. This study distinguishes three types of ETS: strategic technology alliances, acquisitions and licensing-in. We argue whether firms are able to realize wide ETS, is a function of organizational capabilities, and those capabilities may vary along the value chain. When distinguishing firms by their upstream R&D, product portfolio related, and downstream capabilities, we obtain that all value chain related capabilities exert a significant effect on the total number of ETS in a way, that more-capable firms collocate less those activities than less-capable firms. The paper also reveals some subtleties concerning the effects of diverse value chain activities on the isolation of different forms of external technology search. Accordingly, (1) instead of the simply stock of upstream technological capabilities, their rate of generality is what matters for the dispersion of ETS; (2) the generality of upstream technology has more effects on strategic technology alliances and acquisitions, than on licensing-in; (3) the extensiveness of product portfolio implies higher impact on strategic technology alliances and acquisitions, and no effect on licensing-in; (4) downstream assets are related to strategic technology alliances and licensing-in but without any effect on acquisitions; (5) these results hold robust for different geographical gradation. We test our hypotheses using a novel data set on firms global ETS location decisions from the technology intensive Security Software Industry by considering firm dyad as the unit of analysis.