New insight into technology licensing strategy and innovation performance: Evidence from Chinese latecomers in high-tech industries

Abstract

As a catalyst for endogenous technological change, inward technology licensing can improve firm's innovation performance. This paper investigates the effect of learning by licensing and strategic choice of technology licensed in on subsequent innovation performance. We extend the inward technology licensing strategy to the latecomer context, addressing two critical factors: (1) number of licenses and (2) age of technology licensed in. We hypothesize about the relationship of the licensee's innovation performance with number of licenses and age of technology licensed in, as well as the moderating effect of the licensee's absorptive capability. Based on a sample of 154 Chinese firms from four high-tech industries, empirical evidence is found to support our arguments. © 2011 IEEE.