External technology sourcing from developed countries has been one of the most important vehicles by which emerging market firms (EMFs) sustain competiveness. Foreign advanced technologies offer EMFs opportunities to gain access to state-of-the-art technologies and upgrade their competitiveness. However, we have also witnessed an emerging trend of external acquisition of technology by EMFs firms in both international and domestic markets. Why some EMFs are active in sourcing both domestic and international technologies instead of being significantly in favour of foreign technologies from developed countries? We argue that exploring the determinants of EMFs’ choice with regard to EMFs’ strategic choice of souring domestic or foreign technology becomes the key to understanding why EMFs are increasingly gaining prominence in the global competitive landscape. Thus, this paper tends to advance our understanding of EMF competitiveness by adding a crucial link of EMFs strategic choice regarding the origin of technology sourcing from different origins and exploring the determinants for such a choice through the lens of internationalization, innovation and institutions (3 I’s) within a coherent framework. Based on a unique sample of 389 Chinese firms on their inward technology licensing activities through an observation period from 2000 to 2005, it is found that (1) firms’ international market orientation; (2) firm’s technological capability; (3) regional innovation capability; and (4) institutional change (China’s concession to WTO) are positively associated with these firms’ preferences for in-licensing foreign technology.
Proceedings of 13th Annual Conference of the European Academy of Management (euram), 2013
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13th Annual Conference of the European Academy of Management (EURAM 2013)