External technology acquisition and firm
performance: A longitudinal study
, Jiann-Chyuan Wang
Department of Business Administration, National Taipei University,
151 University Rd., San Shia, Taipei 237, Taiwan
Chung-Hua Institution for Economic Research, 75 Chang-Hsing St., Taipei 106, Taiwan
Received 1 January 2005; received in revised form 5 July 2005; accepted 6 July 2005
External technology acquisition has been viewed as an important method used by firms to achieve
higher economic returns. However, only a few studies have evaluated the contribution of external
technology acquisition to firm performance. This lack of research is surprising because the benefits of
external technology acquisition to innovation output have been emphasized extensively in the literature.
This study therefore investigates the extent to which external technology acquisition effects a firm's
performance, and how this effect is moderated by internal R&D efforts. This analysis concentrates on the
electronics-manufacturing industry, taking advantage of the relative abundance of data on longitudinal
investigation variables. A longitudinal sample allows this examination to control extraneous effects and
to provide more convincing evidence for the relationship between external technology acquisition and
firm performance. The analytical sample comprises a total of 341 Taiwanese electronics-manufacturing
firms over the period from 1998 to 2002. The least square dummy variable analysis method reveals that
external technology acquisition does not provide a significant contribution to firm performance per se;
however, the positive impact of external technology acquisition on firm performance increases with the
level of internal R&D efforts. Verifications for robustness and the split-sample analyses both validate the
results in the setting of larger firms.
© 2007 Published by Elsevier Inc.
Keywords: External technology acquisition; Internal R&D effort; Firm performance
Available online at www.sciencedirect.com
Journal of Business Venturing 23 (2008) 91 –112
Corresponding author. Tel.: +886 2 86746568; fax: +886 2 86715912.
E-mail addresses: firstname.lastname@example.org (K.-H. Tsai), email@example.com (J.-C. Wang).
Tel.: +886 2 27356006 605; fax: +886 2 27390615.
0883-9026/$ - see front matter © 2007 Published by Elsevier Inc.