Make-or-Buy Decisions in Patent Related Services
23 Pages Posted: 3 Mar 2008
Among the most prominent theoretical frameworks dealing with the economic underlyings of firms' make-or-buy decisions are Transaction Cost Economics (TCE) and the Resource Based View (RBV). Relying on panel data covering 107 European firms over eight years, I test predictions from both TCE and RBV with regard to the outsourcing of patent related services simultaneously. Modelling the share of outsourced patent applications in a Negative Binomial Panel Regression Model, I find joint explanatory power of both approaches. My findings support previous literature, arguing for an integration of TCE and RBV to a comprehensive theoretical framework of firms' make-or-buy decisions.
Keywords: outsourcing, make-or-buy, resource based view, transaction cost economics, patent attorney, IP department
JEL Classification: L22, L80, M21
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