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Do External Technology Acquisitions Matter For Innovative Efficiency and Productivity?

Author

Listed:
  • Gantumur, Tseveen

    (DIW)

  • Stephan, Andreas

    (JIBS)

Abstract

To quickly adapt to technological change and developments, and thus remain competitive, firms increasingly resort to the use of external technology. This paper investigates whether and to what extent the acquisition of external disembodied technology affects the efficiency and productivity in innovation of technology acquiring firms. Using the stochastic frontier analysis combined with a difference-in-difference matching approach and firm-level panel from the German Innovation Survey for the period 1992-2004, we find that manufacturing firms that acquire disembodied technology experience more growth in innovative productivity than nonacquiring firms do. Thus, this study provides evidence on complementarity between internal and external R&D in innovation production, which is attributed by increasing returns to R&D scale and increasing technical efficiency. Moreover, we find that firm size significantly contributes to innovative efficiency and productivity of external technology acquirers.

Suggested Citation

  • Gantumur, Tseveen & Stephan, Andreas, 2010. "Do External Technology Acquisitions Matter For Innovative Efficiency and Productivity?," Working Paper Series in Economics and Institutions of Innovation 222, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0222
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    Cited by:

    1. Giovanni Cerulli & Bianca Potì, 2013. "Managerial capacity in the innovation process and firm profitability," CERIS Working Paper 201301, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    2. Barbara Fidanza, 2019. "Does Technology Matter When Selecting a Target Firm in an M&A? Some Evidence on a European M&A Sample," International Business Research, Canadian Center of Science and Education, vol. 12(5), pages 111-122, May.
    3. Barbara Fidanza, 2017. "Quali driver nella selezione delle target in operazioni di M&A? Una verifica empirica nel mercato italiano," Working Papers 52-2017, Macerata University, Department of Studies on Economic Development (DiSSE), revised Jan 2018.
    4. Gutierrez, Juan Julio & Correa, Paulo, 2012. "Commercialization of publicly funded research and development (R&D) in Russia : scaling up the emergence of spinoff companies," Policy Research Working Paper Series 6263, The World Bank.
    5. Cullmann, Astrid & Zloczysti, Petra, 2013. "Towards an Efficient Use of R&D ? Accounting for Heterogeneity in the OECD," CEPR Discussion Papers 9345, C.E.P.R. Discussion Papers.
    6. Nan Wang & Mingdi Xiao & Ivan Savin, 2021. "Complementarity effect in the innovation strategy: internal R&D and acquisition of capital with embodied technology," The Journal of Technology Transfer, Springer, vol. 46(2), pages 459-482, April.
    7. Joseph D. Alba & Peter X. K. Song & Peiming Wang, 2013. "Is There A Positive Association Between Merger And Acquisition And Non-Merger And Acquisition Fdi? Firm-Level Evidence From Japanese Foreign Direct Investment Into United States," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 58(04), pages 1-17.

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    Keywords

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    JEL classification:

    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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