1. Vertical integration and innovative performance: The effects of external knowledge sourcing modes
- Author
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Li, Hsiu-Ling and Tang, Ming-Je
- Subjects
Business ,Business, general ,High technology industry - Abstract
To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.technovation.2010.03.004 Byline: Hsiu-Ling Li, Ming-Je Tang Keywords: Vertical integration; Innovative performance; Organizational learning; External knowledge sourcing Abstract: We set out in this study to analyze the impact of vertical integration on the innovative performance of a firm and to explore the interaction between vertical integration and different modes of external knowledge sourcing. Our empirical results reveal an initial increase in the effect of vertical integration on innovative performance up to a certain level of integration, although this is subsequently followed by a decline; that is, the relationship is characterized by an inverted U-shape. The results further reveal that external knowledge sourcing is positively related to the innovative performance of a firm, albeit with a negative interaction with the level of vertical integration. In other words, firms with higher levels of vertical integration may be faced with barriers to the acquisition of external knowledge. Our findings suggest that firms should be cautious in their pursuit of a strategy of vertical integration, given the non-monotonic impact on innovative performance, whilst an increase in the level of vertical integration is also likely to diminish the effectiveness of the external knowledge sourcing. Author Affiliation: Department of International Business, National Taiwan University, Taipei 106, Taiwan
- Published
- 2010