Influences of technological attributes on sourcing of manufacturing technologies in developing countries

Abstract

Purpose As part of a new focus on a better balance of investment in innovation activities in developing countries, this study aims to understand the effects of technological attributes (technological complexity and type of technology) on manufacturing technology sourcing (whether firms choose either internal development or external sources). Design/methodology/approach Multiple-case studies were conducted in the Peruvian manufacturing sector. Findings The authors found that, across Peruvian manufacturing firms, they develop a certain manufacturing technology related to their capabilities. However, when the total cost of acquisition is lower than internal costs of developing technologies, they will choose external sources, regardless of their capabilities and complexity of the technology. In addition, analysis of the type of technology indicated that the pursuit of simultaneous exploration and exploitation occurs when firms use external sources rather than internal. Research limitations/implications This study has the limitation that data have been collected years after the decision-making process; the results are based solely on the authors’ analysis using the case of Peruvian industry, and they do not track the impact on the performance of manufacturing technology decisions. Practical implications The findings have important implications for technology managers of South American manufacturing firms that are decision makers in the sourcing of new manufacturing technologies. Originality/value The results of this study provide literature with insights into technology sourcing strategy in developing countries and the importance of progress in transitioning to technological innovation and catchup.