Balancing your technology-sourcing portfolio: How sourcing mode diversity enhances innovative performance

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Abstract

With external innovation becoming more and more important, many firms struggle with the question of how to balance their technology-sourcing portfolio. This study addresses this issue by looking at the effects of portfolio diversity on performance outcomes and the conditions under which diversity is most likely to materialize. Using a dataset of strategic investments by pharmaceutical firms, the results show that the variance in relative technological proximity between the focal firm and its partners exhibits an inverted U-shaped relationship with innovative performance and that this relationship is affected by the diversity of the external sourcing modes used in the portfolio.
Original languageEnglish
Pages (from-to)610-621
Number of pages12
JournalStrategic Management Journal
Volume34
Issue number5
DOIs
Publication statusPublished - 23 Nov 2012

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