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Technology licensing and innovation performance: evidence from Chinese latecomers in high-tech industries

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  • Y.Y. Zhao
  • P.K. Wong
  • A.M. Subramanian
  • C.C. Hang

Abstract

As a catalyst for endogenous technological change, inward technology licensing (ITL) can improve a firm's innovation performance. This paper investigates the effect of learning by licensing and choice of licensed-in technologies on innovation performance. We extend the ITL strategy to the latecomer context, addressing two critical factors: (1) number of licenses and (2) age of licensed-in technology. We hypothesize about the relationship of the licensee's innovation performance with the number of licenses and age of licensed-in technology, as well as the moderating effect of the licensee's absorptive capacity. Based on a sample of 154 Chinese high-tech firms, empirical evidence is found in support of our arguments. This study is the first to consider the significance of the age of licensed-in technology to innovation performance and found that the number of licenses has a curvilinear (an inverted U) relationship with innovation performance. We also confirmed the significant moderating effect of absorptive capacity on the above two relationships.

Suggested Citation

  • Y.Y. Zhao & P.K. Wong & A.M. Subramanian & C.C. Hang, 2014. "Technology licensing and innovation performance: evidence from Chinese latecomers in high-tech industries," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 12(2), pages 125-147, May.
  • Handle: RePEc:taf:jocebs:v:12:y:2014:i:2:p:125-147
    DOI: 10.1080/14765284.2014.900946
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    Cited by:

    1. Daniel Shapiro & Yao Tang & Miaojun Wang & Weiying Zhang, 2017. "Monetary incentives and innovation in Chinese SMEs," Asian Business & Management, Palgrave Macmillan, vol. 16(3), pages 130-157, July.

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