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Process Technology Sourcing and the Innovation Context
Author(s) -
Allred Brent B.,
Swan K. Scott
Publication year - 2014
Publication title -
journal of product innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.646
H-Index - 144
eISSN - 1540-5885
pISSN - 0737-6782
DOI - 10.1111/jpim.12211
Subject(s) - transaction cost , business , industrial organization , context (archaeology) , subsidiary , strategic sourcing , corporate governance , order (exchange) , process (computing) , open innovation , marketing , knowledge management , computer science , multinational corporation , paleontology , strategic financial management , finance , strategic planning , biology , operating system
We employ transaction cost economics ( TCE ) and inspiration from technology innovation management to advance a model of technology sourcing governance and performance in the international environment. We hypothesize that the innovation context moderates the relationship between process technology sourcing and performance. The innovation context is defined as external factors reflected in the appropriability regime and whether the industry is characterized by a dominant design. Moreover, we suggest that, contingent upon the innovation context, subsidiaries prefer internal development to secure a positional advantage. A multi‐industry sample of 105 subsidiaries is used to test the hypotheses. We find support for a contextual model linking process technology sourcing strategy to subsidiary performance. Motivated by TCE , we find tentative evidence for a preference order of technology sourcing beginning with internal development and ending with market sourcing, particularly when the appropriability regime is weak.