DETERMINANTS AND RISK-TAKING BEHAVIOUR OF OUTSOURCING INNOVATION DECISION AND INTENSITY IN VIETNAM: MAKE, PURE OR HYBRID?

Abstract

This study investigates determinants and risk-taking behaviour of outsourcing innovation decision as well as the intensity in Vietnam. Outsourcing decision consists of an exclusive make (Make), buy (Pure) or a combination of both internal and external knowledge acquisition (Hybrid) in the innovation strategies. We also define outsourcing innovation intensity as the proportion of costs used for outsourcing innovation. We distinguish these outsourcing strategies in relation to product and process innovation. Based on the unique survey data in Vietnam available in 2016, we highlight the importance of the firm-specific factors such as R&D intensity, exporting status, and share of qualified employees dedicated to R&D activities; the firms’ obstacles and objectives for innovation; and the information sources of innovation on the outsourcing innovation decision and intensity. The other striking finding is that outsourcing innovation is risk-taking behaviour, but outsourcing product innovation strategy is a less risky option as compared to the outsourcing process innovation in the case of Vietnamese enterprises.