Abstract

http://ssrn.com/abstract=1617054
 


 



Productivity and the Role of Complementary Assets in Firms’ Demand for Technology Innovations


Marco Ceccagnoli


Georgia Institute of Technology - Scheller College of Business

Stuart J. H. Graham


Georgia Institute of Technology - Scheller College of Business

Matthew John Higgins


Georgia Institute of Technology - Scheller College of Business; National Bureau of Economic Research (NBER)

Jeongsik Lee


Drexel University - LeBow College of Business

June 2010

Industrial and Corporate Change, Vol. 19, Issue 3, pp. 839-869, 2010

Abstract:     
This article uses data on transactions in the pharmaceutical industry to examine the demand-side of technology outsourcing. By integrating a transaction-cost economics perspective with the analysis of internal R&D capabilities, we find that firms with relatively more cospecialized complementary assets or relatively strong internal R&D productivity have a lower propensity to source a technology from outside the firm. We show, however, that since downstream capabilities and internal R&D are complementary activities in the presence of asset specificity and transaction costs, a decrease in internal R&D productivity reduces the marginal value of the downstream assets within firm boundaries, thus stimulating the demand for external technology.


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Date posted: June 4, 2010  

Suggested Citation

Ceccagnoli, Marco and Graham, Stuart J. H. and Higgins, Matthew John and Lee, Jeongsik, Productivity and the Role of Complementary Assets in Firms’ Demand for Technology Innovations (June 2010). Industrial and Corporate Change, Vol. 19, Issue 3, pp. 839-869, 2010. Available at SSRN: http://ssrn.com/abstract=1617054 or http://dx.doi.org/dtq033

Contact Information

Marco Ceccagnoli (Contact Author)
Georgia Institute of Technology - Scheller College of Business ( email )
800 West Peachtree St.
Atlanta, GA 30308
United States

Stuart J. H. Graham
Georgia Institute of Technology - Scheller College of Business ( email )
800 West Peachtree St. NW
Atlanta, GA 30308
United States
404-385-0953 (Phone)
404-894-6030 (Fax)
HOME PAGE: http://https://www.scheller.gatech.edu/graham

Matthew John Higgins
Georgia Institute of Technology - Scheller College of Business ( email )
800 West Peachtree St.
Atlanta, GA 30308
United States
404-894-4368 (Phone)
404-894-6030 (Fax)

National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Jeongsik Lee
Drexel University - LeBow College of Business ( email )
3141 Chestnut Street
Philadelphia, PA 19104
United States

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