Can external corporate venturing broaden firm's technological scope? The role of complementary assets

  • Authors:

  • Hsien-Che Lai;Yi-Chia Chiu;Yi-Ching Liaw

  • Affiliations:

  • Department of Business & Management and Graduate Institute of Technology Management, National University of Tainan, No. 65, Yu-Nan Street, Tainan City 702, Taiwan;Graduate Institute of Intellectual Property, National Chengchi University, No. 64, Sec. 2, Zhi Nan Road, Taipei City, Taiwan;Graduate Institute of Business Administration, National Chung Hsing University, 3F, No. 19, Ln. 244, Fugang Street, Taipei City 111, Taiwan

  • Venue:
  • Journal of Engineering and Technology Management
  • Year:
  • 2010

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Abstract

This study applies two theoretical perspectives-resource-based view (RBV) and organizational learning-to explore how a firm's external corporate venturing (CV) influences its technological scope. Using data from 583 electronics and information technology firms in Taiwan for the period from 1997 to 2006, the results indicate that external CVs facilitate an established firm's broadening of its technological scope. Moreover, this study calls into question the idea that a firm's decisions regarding technological scope may be due to a specific factor that governs the extent of technological specialization and diversification. We identify this factor as the complementary assets of established firms. This study, thus, investigates whether complementary assets moderate the relationship between external CV in established firms and those firms' technological scope. The analytical results also support the idea that increasing investments in specialized complementary assets will urge firms engaged in external CV to concentrate on their technological scope. Therefore, this study addresses the notion that concentrated technological scope is the conjunction of technological capabilities and complementary assets, not determined by either individually.