External Technology Sources: Embodied or Disembodied Technology Acquisition

University Pompeu Fabra, Economics and Business Working Paper No. 444

22 Pages Posted: 3 Jul 2000

See all articles by Bruno Cassiman

Bruno Cassiman

Harvard University - Business School (HBS)

Reinhilde Veugelers

Catholic University of Leuven (KUL) - Department of Applied Economics; Centre for Economic Policy Research (CEPR)

Abstract

This paper analyzes the choice between different innovation activities of a firm. In particular, we study the technology acquisition decision of the firm, i.e. its technology BUY decision as part of the firm's innovation strategy. We take a closer look at the different types of external technology acquisition where we distinguish two broad types of technology buy decisions. On the one hand, the firm can acquire new technology which is embodied in an asset that is acquired such as new personnel or (parts of) other firms or equipment. On the other hand, the firm can obtain new technology disembodied through a licensing agreement or by outsourcing the technology development from an R&D contractor or consulting agency. Through a series of Probit regressions, we discuss variables that might affect external technology acquisition choices of the firm and pay special attention to the firm's abilities to scan the market for technology and to absorb the technology acquired. Furthermore, we analyze the effect of different appropriation regimes on the decision of the firm to source technology.

Keywords: Technology Acquisition, Innovation, Appropriability, Absorptive Capacity

JEL Classification: L22, O32

Suggested Citation

Cassiman, Bruno and Veugelers, Reinhilde, External Technology Sources: Embodied or Disembodied Technology Acquisition. University Pompeu Fabra, Economics and Business Working Paper No. 444, Available at SSRN: https://ssrn.com/abstract=224582 or http://dx.doi.org/10.2139/ssrn.224582

Bruno Cassiman (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Reinhilde Veugelers

Catholic University of Leuven (KUL) - Department of Applied Economics ( email )

Leuven, B-3000
Belgium
+32 16 32 6908 (Phone)
+32 16 32 6732 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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