Title: A longitudinal examination of performance of two ways on innovation in Taiwan: internal R&D investment and external technology aquisition

Authors: Kuen-Hung Tsai, Jiann-Chyuan Wang

Addresses: Department of Business Administration, National Taipei University, 151 University Rd., San Shia, Taipei 237, Taiwan. ' Director of the Division of Taiwan Economy, Chung-Hua Institution for Economic Research, 75 Chang-Hsing St., Taipei 106, Taiwan

Abstract: While internal Research and Development (R&D) investment and external technology acquisition are the two primary ways adopted by Taiwan|s manufacturing firm|s for innovation, relatively little research has focused on evaluating the contribution of these two ways of innovation on firm|s performance. This study therefore aims to investigate the impact of (1) internal R&D (2) external technology acquisition and (3) internal R&D investment combined with external technology acquisition on firm|s performance, focusing on a developing country, Taiwan. A total of 341 electronics-manufacturing firms balanced over the period from 1998 to 2002 are taken as the analytical sample. Based on an extended framework of production function, the results reveal internal R&D investment has a positive effect on firm performance, whereas external technology acquisition per se does not. In addition, the results suggest that the combination of both internal R&D investment and external technology acquisition enhance firm|s performance. Furthermore, the sensitivity analyses validate these results of this study.

Keywords: research and development; internal R&D investment; technological innovation; external technology acquisition; firm performance; longitudinal analysis; high technology firms; high tech industry; Taiwan; technology management; manufacturing.

DOI: 10.1504/IJTM.2007.013493

International Journal of Technology Management, 2007 Vol.39 No.3/4, pp.235 - 247

Available online: 02 May 2007 *

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