Organizing for continuous technology acquisition: the role of R&D geographic dispersion

Abstract

External technology acquisition has been proved to be an important strategy to enhance firms’ innovation performance. However, previous studies claim that companies acquiring technologies tend to not carry on with this strategy over time, thus limiting their attitude toward continuous technology acquisition. Moreover, the extant literature also highlights that this attitude is strongly influenced by their organizational structure. Therefore, in the present paper, we investigate the relationship between how firms organize R&D activities and continuous technology acquisition. Specifically, given the increasing globalization of technological development, we focus on the role of R&D geographic dispersion, and how its influence is moderated by firms’ technological diversification. We tested our hypotheses on longitudinal data of 303 biotechnology firms that acquired, at least, one USPTO patented technology over the period 1982–2012. Results reveal that R&D geographic dispersion is curvilinearly (inverted U-shaped) related to continuous technology acquisition, with negative returns occurring earlier in technology-diversified companies.