Technology in-sourcing and the creation of Pioneering technologies

Abstract

In this paper we analyze the effect of different external technology sourcing modes on the creation of radical innovation in companies. Moreover, since prior research has indicated that exploration consists of looking beyond both organizational and technological boundaries, we also include the role of technological distance between the partnering firms as well as the role of technological newness. In particular, we examine how they affect the relationship between external technology sourcing and the creation of pioneering technologies (technologies that do not build on any existing technologies), which are used as a proxy for radical innovations. The results indicate that strategic alliances and corporate venture capital investments have a positive effect on the generation of pioneering technologies, whereas the effect of M&As is found to be negative. Additionally, the impact of these governance modes on the creation of pioneering technology is indeed affected by the spanning of technological boundaries.