Do External Technology Acquisitions Matter for Innovative Efficiency and Productivity?

41 Pages Posted: 4 Aug 2010

See all articles by Tseveen Gantumur

Tseveen Gantumur

Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste

Andreas Stephan

DIW Berlin, German Institute for Economic Research

Date Written: July 2010

Abstract

To quickly adapt to technological change and developments, and thus remain competitive, firms increasingly resort to the use of external technology. This paper investigates whether and to what extent the acquisition of external disembodied technology affects the efficiency and productivity in innovation of technology acquiring firms. Using the stochastic frontier analysis combined with a difference-in-difference matching approach and firm-level panel from the German Innovation Survey for the period 1992-2004, we find that manufacturing firms that acquire disembodied technology experience more growth in innovative productivity than non-acquiring firms do. Thus, this study provides evidence on complementarity between internal and external R&D in innovation production, which is attributed by increasing returns to R&D scale and increasing technical efficiency. Moreover, we find that firm size significantly contributes to innovative efficiency and productivity of external technology acquirers.

Keywords: Technology acquisition, innovative efficiency, innovative productivity, SFA, Difference-in-difference matching

JEL Classification: O30, L24, L25, L60

Suggested Citation

Gantumur, Tseveen and Stephan, Andreas, Do External Technology Acquisitions Matter for Innovative Efficiency and Productivity? (July 2010). DIW Berlin Discussion Paper No. 1035, Available at SSRN: https://ssrn.com/abstract=1652704 or http://dx.doi.org/10.2139/ssrn.1652704

Tseveen Gantumur (Contact Author)

Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste ( email )

Rhöndorfer Str. 68
53604 Bad Honnef, 53604
Germany

Andreas Stephan

DIW Berlin, German Institute for Economic Research ( email )

Mohrenstraße 58
Berlin, 10117
Germany

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