Relationships Between Firms' Sources of Technologies and Their Product Market Opportunities
We investigated the relationship between sources of technology and product-market opportunities. The principal question that was investigated was: How does the overall opportunity pool of a firm depend on its mix of internally developed technologies and externally acquired technologies? Or, is it independent of the mix, and dependent only on the total number of technologies? Commonly available and reported statistics focus on total R&D spending. Even the more recent literature that focuses on the value of intangible assets like knowledge only focuses on the value of R&D expenditure. Based on our reading of the literature and conversations with managers, we came around to a conjecture that the mix matters. Our survey results indeed support our conjecture. We found to our surprise that firms having a substantial proportion of internal technologies tended to have higher number of product market opportunities. The best mix varies by industry type, i.e., high tech industries have a different best mix than do other industries.
University of Illinois - Urbana-Champaign
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University of Illinois at Urbana-Champaign