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Key factors affecting acquisition of technological capabilities from foreign acquiring firms by small and medium sized local firms

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  • Park, Byung Il
  • Ghauri, Pervez N.

Abstract

The objectives of this study are to investigate whether foreign acquiring firms contribute towards enhancing technological capabilities of local firms in foreign markets. Given that drivers promoting technology acquisition from acquiring firms have been largely neglected in the literature, we attempt to identify the key factors influencing this phenomenon. Secondly, although several studies have discussed knowledge exchange through international acquisitions (IAs), little attention has been given to small and medium sized local acquired firms (SMLFs). By using three dimensions of organizational characteristics based on absorptive capacity, our empirical evidence reveals three key findings. First, to develop an effective absorptive capacity, mere exposure to favorable learning environments is not sufficient, and that intensity of effort is a critical component functioning as a facilitator towards the extent of learning. Second, what is already known can be improved when partners share similar business background. This is because the possession of relevant knowledge based on business relatedness increases the boundary of curriculum in organizations. Third, collaborative support from knowledge transferors is a significant catalyst generating a specific learning capability.

Suggested Citation

  • Park, Byung Il & Ghauri, Pervez N., 2011. "Key factors affecting acquisition of technological capabilities from foreign acquiring firms by small and medium sized local firms," Journal of World Business, Elsevier, vol. 46(1), pages 116-125, January.
  • Handle: RePEc:eee:worbus:v:46:y:2011:i:1:p:116-125
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. repec:spr:manint:v:52:y:2012:i:2:d:10.1007_s11575-012-0136-1 is not listed on IDEAS
    2. Suk Choi & Christopher Williams, 2014. "The impact of innovation intensity, scope, and spillovers on sales growth in Chinese firms," Asia Pacific Journal of Management, Springer, vol. 31(1), pages 25-46, March.
    3. repec:eee:iburev:v:26:y:2017:i:6:p:1075-1087 is not listed on IDEAS
    4. Jeon, Yongbok & Park, Byung Il & Ghauri, Pervez N., 2013. "Foreign direct investment spillover effects in China: Are they different across industries with different technological levels?," China Economic Review, Elsevier, vol. 26(C), pages 105-117.
    5. Sánchez-Sellero, Pedro & Rosell-Martínez, Jorge & García-Vázquez, José Manuel, 2014. "Absorptive capacity from foreign direct investment in Spanish manufacturing firms," International Business Review, Elsevier, vol. 23(2), pages 429-439.
    6. Sajjad Jasimuddin & Jun Li & Nicholas Perdikis, 2015. "Linkage between geographic space and knowledge transfer by multinational enterprises: a structural equation approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(3), pages 769-795, May.
    7. Park, Jeong-Yang & Harris, Simon, 2014. "Microfoundations for learning within international joint ventures," International Business Review, Elsevier, vol. 23(3), pages 490-503.
    8. repec:eee:iburev:v:26:y:2017:i:5:p:896-907 is not listed on IDEAS
    9. Brueller, Nir N. & Ellis, Shmuel & Segev, Eli & Carmeli, Abraham, 2015. "Knowing when to acquire: The case of multinational technology firms," International Business Review, Elsevier, vol. 24(1), pages 1-10.
    10. Park, Byung Il & Ghauri, Pervez N., 2015. "Determinants influencing CSR practices in small and medium sized MNE subsidiaries: A stakeholder perspective," Journal of World Business, Elsevier, vol. 50(1), pages 192-204.
    11. Park, Byung Il & Choi, Jiyul, 2014. "Control mechanisms of MNEs and absorption of foreign technology in cross-border acquisitions," International Business Review, Elsevier, vol. 23(1), pages 130-144.

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