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Balancing your technology‐sourcing portfolio: How sourcing mode diversity enhances innovative performance
Author(s) -
Van de Vrande Vareska
Publication year - 2013
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.2031
Subject(s) - portfolio , diversity (politics) , strategic sourcing , business , industrial organization , balance (ability) , variance (accounting) , mode (computer interface) , marketing , strategic planning , computer science , finance , medicine , accounting , strategic financial management , sociology , anthropology , physical medicine and rehabilitation , operating system
With external innovation becoming more and more important, many firms struggle with the question of how to balance their technology‐sourcing portfolio. This study addresses this issue by looking at the effects of portfolio diversity on performance outcomes and the conditions under which diversity is most likely to materialize. Using a dataset of strategic investments by pharmaceutical firms, the results show that the variance in relative technological proximity between the focal firm and its partners exhibits an inverted U‐shaped relationship with innovative performance and that this relationship is affected by the diversity of the external sourcing modes used in the portfolio.