New Ventures' Inward Licensing: Examining the Effects of Industry and Strategy Characteristics

European Management Review, Vol. 2, No. 3, pp. 154-166, 2005

Posted: 29 Aug 2008

See all articles by Shaker A. Zahra

Shaker A. Zahra

University of Minnesota - Twin Cities - Carlson School of Management

Thomas Keil

University of Zurich - Department of Business Administration

Markku V. J. Maula

Aalto University, Dept. of Industrial Engineering and Management, Institute of Strategy

Date Written: 2005

Abstract

New ventures compete by creating innovative products. Liabilities of newness and inexperience, limited resources, rapid technological obsolescence and constantly changing market conditions often encourage new ventures to license other companies' technologies to complement and augment their internally developed innovations. Building on the knowledge-based view of the firm, we propose that the intensity of new ventures' use of inward licensing reflects the demands of their industries and competitive strategies. The results of an empirical study of 361 US new ventures show that industry characteristics and competitive strategy influence their inward licensing as a means of lowering costs and maintaining strategic flexibility while building their capabilities.

Keywords: New venture, technological capabilities, inward licensing

JEL Classification: M13, O32

Suggested Citation

Zahra, Shaker A. and Keil, Thomas and Maula, Markku V. J., New Ventures' Inward Licensing: Examining the Effects of Industry and Strategy Characteristics (2005). European Management Review, Vol. 2, No. 3, pp. 154-166, 2005. Available at SSRN: https://ssrn.com/abstract=1246702

Shaker A. Zahra (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Thomas Keil

University of Zurich - Department of Business Administration ( email )

Seilergraben 53
Zurich, CH-8001
Switzerland

HOME PAGE: http://www.business.uzh.ch/professorships/international-management/team/keil.html

Markku V. J. Maula

Aalto University, Dept. of Industrial Engineering and Management, Institute of Strategy ( email )

PO Box 15500
FI-00076 AALTO
Espoo
Finland

HOME PAGE: http://users.tkk.fi/u/mmaula/

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