Affiliation:
1. Cameron School of Business University of North Carolina Wilmington 601 S. College Rd. Wilmington North Carolina 28403 USA
2. Rawls College of Business Texas Tech University 703 Flint Ave. Lubbock Texas 79403 USA
Abstract
Research has identified two principal mechanisms for emerging economy (EE) firms to technologically catch up with advanced economy (AE) firms: absorbing knowledge spillovers from AE subsidiaries and internationalizing R&D into AEs. Prior technological catch‐up research has assumed EE firms are merely trailing their AE counterparts on the technological frontier when in fact the research on the bottom of the pyramid, as well as other research streams, have recognized that the different consumer demands in EEs and AEs drive different R&D activities in EEs and AEs. We submit that technological catch‐up requires both the upgrading of technological capabilities and the shifting of R&D activity from solving EE demand problems to solving AE demand problems. Utilizing patent data, we investigate the relative efficacy of AE knowledge spillovers and internationalizing R&D in AEs on technological catch‐up within a dual innovation ecosystem framework. We find that knowledge spillovers affect technological catch‐up through a process that initially decreases the technological capabilities of EE firms before increasing such capabilities as EE firms shift R&D activity towards the AE innovation ecosystem. However, we find that internationalizing R&D in AEs yields a significant positive effect on EE firms' technological capabilities and shifts their innovative activities towards solving AE demand problems.
Funder
University of North Carolina Wilmington
Subject
Management of Technology and Innovation,Strategy and Management,General Business, Management and Accounting,Business and International Management