Share:


Exploring the complementarity between foreign technology, embedded technology and increase of productive capacity

Abstract

This study analyzes the complementarity of foreign technology acquired under license agreements, technology embedded in machinery and equipment and increase in a company’s productive capacity. We use panel data on Brazilian manufacturing companies from the World Bank Surveys. We used the random effects models, estimated by maximum likelihood. The results indicate that foreign technology, embedded technology and increase of productive capacity have a positive and significant impact on labor productivity. The complementarity test reveals that the relationship between the two technologies analyzed is conditionally substitutive and that the relationship between each of these technologies and increase of productive capacity is conditionally complementary.

Keyword : foreign technology, embedded technology, productive capacity, productivity, complementarity approach

How to Cite
González-Blanco, J., Vila-Alonso, M., & Guisado-González, M. (2019). Exploring the complementarity between foreign technology, embedded technology and increase of productive capacity. Technological and Economic Development of Economy, 25(1), 39-58. https://doi.org/10.3846/tede.2019.7600
Published in Issue
Jan 30, 2019
Abstract Views
126
PDF Downloads
94
Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

References

Acevedo, A., Mold, A., & Pérez Caldentey, E. (2009). The analysis of leading sectors: A long term view of 18 Latin American economies (MPRA Paper 15017). Germany: University Library of Munich.

Ahmad, N., & Petersen, D. R. (2007). High-growth enterprises and gazelles – Preliminary and summary sensitivity analysis. Paris: OECD-FORA.

Al-Ali, S. (1995). Developing countries and technology transfer. International Journal of Technology Management, 10(7-8), 704-713.

Attaran, R., Mehrmanesh, H., & Jafarieh, H. (2014). An ANP application for identifying and prioritizing opportunities and threatens for technology transfer, Decision Science Letters, 3, 85-92. https://doi.org/10.5267/j.dsl.2013.07.009

Autio, E., & Laamanen, T. (1995). Measurement and evaluation of technology transfer: Review of technology transfer mechanisms and indicators. International Journal of Technology Management, 10(7-8), 643-664.

Bajo, O., & Díaz, C. (2002). Inversión extranjera directa, innovación tecnológica y productividad. Una aplicación a la industria española. Economía Industrial, 347, 111-124.

Ballot, G., Fakhfakh, F., Galia, F., & Salter, A. (2015). The fateful triangle. Complementarities between product, process and organizational innovation in the UK and France. Research Policy, 44(1), 217-232. https://doi.org/10.1016/j.respol.2014.07.003

Belderbos, R., Carree, M., & Lokshin, B. (2006). Complementarity in R&D cooperation strategies. Review of Industrial Organization, 28(4), 401-426. https://doi.org/10.1007/s11151-006-9102-z

Bogliacino, F., & Pianta, M. (2015). The Pavitt taxonomy, revisited. Patterns of innovation in manufacturing and services. Documentos de trabajo – Escuela de Economía 012631, UN - RCE - CID.

Boston Consulting Group. (1972). Perspectives on experience. Boston MA: The Boston Consulting Group.

Buckley, P., Clegg, J., & Wang, C. (2002). The impact of inward FDI on the performance of Chinese manufacturing firms. Journal of International Business Studies, 38, 447-459. https://doi.org/10.1057/palgrave.jibs.8400274

Buzzell, R. D., Gale, B. T., & Sultan, R. G. M. (1975). Market share: A key to profitability. Harvard Business Review, 53(1), 97-106.

Callejón, M., & Segarra, A. (1999). Business dynamics and efficiency in industries and regions: The case of Spain. Small Business Economics, 13, 253-271. https://doi.org/10.1023/A:1008015317323

Cantore, N., Clara, M., & Soare, C. (2017). Manufacturing as an engine of growth: Which is the best fuel?. Structural Change and Economic Dynamics, 42, 56-66. https://doi.org/10.1016/j.strueco.2017.04.004

Cassiman, B., & Veugelers, R. (2006). In search of complementarity in innovation strategy: Internal R&D and external knowledge acquisition. Management Science, 52(1), 68-82. https://doi.org/10.1287/mnsc.1050.0470

Cassiman, B., Golovko, E., & Martínez-Ros, E. (2010). Innovation, exports and productivity. International Journal of Industrial Organization, 28, 372-376. https://doi.org/10.1016/j.ijindorg.2010.03.005

Catozzella, A., & Vivarelli, M. (2014). Beyond absorptive capacity: In-house R&D as a driver of innovative complementarities. Applied Economics Letters, 21(1), 39-42. https://doi.org/10.1080/13504851.2013.835475

Caves, R. E. (1982). Multinational enterprise and economic analysis. Cambridge: Cambridge University Press.

Choo, K., Lee, K., Ryu, K., & Yoon, J. (2009). Changing performance of business groups over two decades: technological capabilities and investment efficiency in Korean Chaebols. Economic Development and Cultural Change, 57(2), 359-386. https://doi.org/10.1086/592837

Coe, D. T., & Helpman, E. (1995). International R&D spillovers. European Economic Review, 39, 859-887. https://doi.org/10.1016/0014-2921(94)00100-E

Coe, D. T., Helpman, E., & Hoffmaister, A. (1997) North-South R&D spillovers. Economic Journal, 107, 134-149. https://doi.org/10.1111/1468-0297.00146

Cruz-Cázares, C., Bayona-Sáez, C., & García-Marco, T. (2010). R&D Strategies and firm innovative performance: A panel data analysis. International Journal of Innovation Management, 14(6), 1-33. https://doi.org/10.1142/S1363919610002982

Dahlman, C. (2007). Technology, globalization, and international competitiveness: Challenges for developing countries. In Industrial Development for the 21st Century: Sustainable Development Perspectives (pp. 29-83). Department of Economic and Social Affairs, United Nations, New York.

Damanpour, F., & Gopalakrishnan, S. (2001). The dynamics of the adoption of product and process innovations in organizations. Journal of Management Studies, 38(1), 45-65. https://doi.org/10.1111/1467-6486.00227

Darr, E., Argote, L., & Epple, D. (1995). The acquisition, transfer, and depreciation of knowledge in service organizations: Productivity in franchises. Management Science, 41(11), 1750-1762. https://doi.org/10.1287/mnsc.41.11.1750

Day, G. S., & Montgomery, D. B. (1983). Diagnosing the experience curve. Journal of Marketing, 47(2), 44-58. https://doi.org/10.1177/002224298304700205

Doran, J. (2012). Are differing forms of innovation complements or substitutes?. European Journal of Innovation Management, 15(3), 351-371. https://doi.org/10.1108/14601061211243675

Dosi, G. (1988). Sources, procedures and microeconomic effects of innovation. Journal of Economic Literature, 26(3), 1120-1171.

Dutton, J. M., Thomas, A., & Butler, J. E. (1984). The history of progress functions as a managerial technology. Business History Review, 58(2), 204-233. https://doi.org/10.2307/3115048

Fagerberg, J. (1987). A technology gap approach to why growth rates differ. Research Policy, 16, 87-99. https://doi.org/10.1016/0048-7333(87)90025-4

Falvey, R., Foster, N., & Greenaway, D. (2004). Imports, exports, knowledge spillovers and growth. Economics Letters, 85, 209-213. https://doi.org/10.1016/j.econlet.2004.04.007

Foster, L., Haltiwanger, J., & Syverson, C. (2008). Reallocation, firm turnover, and efficiency: Selection on productivity or profitability?. American Economic Review 98(1), 394-425. https://doi.org/10.1257/aer.98.1.394

Freel, M. S. (2000). Do small innovating firms outperform non-innovators?. Small Business Economics, 14(3), 195-210. https://doi.org/10.1023/A:1008100206266

Freeman, C., & Soete, L. (1997). The economics of industrial innovation. London: Pinter.

Geroski, P. A. (1991). Domestic and foreign entry in the United Kingdom: 1983–1984. In P. A. Geroski, J. Schwalbach (Eds.), Entry and market contestability: An international comparison. Oxford: Basil Blackwell.

Griliches, Z. (1986). Productivity, R&D, and basic research at the firm level in the 1970’s. American Economic Association, 76, 141-154.

Griliches, Z. (1998). R&D and productivity: The econometric evidence. Chicago: The University of Chicago Press Books. https://doi.org/10.7208/chicago/9780226308906.001.0001

Guisado-González, M., González-Blanco, J., & Coca-Pérez, J. L. (2017b). Analyzing the relationship between exploration, exploitation and organizational innovation. Journal of Knowledge Management, 21(5), 1142-1162. https://doi.org/10.1108/JKM-01-2017-0039

Guisado-González, M., Wright, L. T., & Guisado-Tato, M. (2017a). Product–process matrix and complementarity approach. The Journal of Technology Transfer, 42(3), 441-459. https://doi.org/10.1007/s10961-015-9435-6

Hall, B. H. (2011). Innovation and productivity. Nordic Economic Policy Review, 2, 167-204. https://doi.org/10.3386/w17178

Hall, B. H., Lotti, F., & Mairesse, J. (2009). Innovation and productivity in SMEs: Empirical evidence for Italy. Small Business Economics, 33, 13-33. https://doi.org/10.1007/s11187-009-9184-8

Henderson, R., & Cockburn, I. (1996). Scale, scope, and spillovers: The determinants of research productivity in drug discovery. The Rand Journal of Economics, 27(1), 32-59.

Henkerson, M., & Johansson, D. (2008). Gazelles as job creators – A survey and interpretation of the evidence (IFN working paper series, No. 733). Research Institute of Industrial Economics, Stockholm.

Hollander, S. (1965). The sources of increased efficiency: A study of DuPont Rayon Plants. Cambridge: M.I.T. Press.

Jirjahn, U., & Kraft, K. (2011). Do spillovers stimulate incremental or drastic product innovations? Evidence from German stablishment data. Oxford Bulletin of Economics and Statistics, 73(4), 509-538. https://doi.org/10.1111/j.1468-0084.2010.00618.x

Jovanovic, B. (1982). Selection and the evolution of industry. Econometrica, 50(3), 649-670. https://doi.org/10.2307/1912606

Kagami, M. (1995). The voice of East Asia: Development implication for Latin America. Tokyo: Institute of Developing Economies.

Kaldor, N. (1960). Causes of growth and stagnation in the world economy. Cambridge: Cambridge University Press.

Kaynak, E. (1985). Transfer of technology from developed to developing countries: some insights from Turkey. In A. Coskun Samli (Ed.), Technology transfer: Geographic, economic, cultural, and technical dimensions (pp. 155-176). Westport, Conn.: Quorum Books.

Khanna, T., & Palepu, P. (2000). Is group affiliation profitable in emerging markets? An analysis of diversified Indian business groups. The Journal of Finance, 55(2), 867-891. https://doi.org/10.1111/0022-1082.00229

Labanio, G., & Moro, S. (2011). Manufacturing industry and economic growth in Latin America: A kaldorian approach. In Proceedings of the 37th Brazilian Economics Meeting. Brazilian Association of Graduate Programs in Economics.

Laursen, K., & Salter, A. (2006). Open for innovation: The role of openness in explaining innovation performance among U.K. manufacturing firms. Strategic Management Journal, 27(2), 131-150. https://doi.org/10.1002/smj.507

Leiponen, A. (2005). Skills and innovation. International Journal of Industrial Organization, 23(5-6), 303-323. https://doi.org/10.1016/j.ijindorg.2005.03.005

Lokshin, B., Belderbos, R., Carree, M. (2008). The productivity effects of internal and external R&D: Evidence from a dynamic panel data model. Oxford Bulletin of Economics and Statistics, 70(3), 399-413. https://doi.org/10.1111/j.1468-0084.2008.00503.x

Love, J. H., & Roper, S. (1999). R&D, technology transfer and networking effects on innovation intensity. Review of Industrial Organization, 15(1), 43-64. https://doi.org/10.1023/A:1007757110963

Mairesse, J., Mohnen, P., & Kremp, E. (2005). The importance of R&D and innovation for productivity: A reexamination in light of the 2000 French innovation survey. Annales d’Economie et de Statistique, 79-80, 489-529.

Milgrom, P., & Roberts, J. (1990). The economics of modern manufacturing: Technology, strategy, and organization. American Economic Review, 80, 511-528.

Miravete, E., & Pernias, J. (2006). Innovation complementarity and scale of production. Journal of Industrial Economics, 54(1), 1-29. https://doi.org/10.1111/j.1467-6451.2006.00273.x

Mohnen, P., & Hall, B. H. (2013). Innovation and productivity: An update. Eurasian Business Review, 3(1), 47-65.

Mohnen, P., & Röller, L. H. (2005). Complementarities in innovation policy. European Economic Review, 49(6), 1431-1450. https://doi.org/10.1016/j.euroecorev.2003.12.003

Office of Business and Industrial Analysis. (1995). Engines of growth. Manufacturing industries in the U.S. economy. U.S. Department of Commerce.

Olukoshi, A. O. (1990). The dynamics of corporate technology transfer to Nigeria. In M. Chatterji (Ed.), Technology transfer in the developing countries. London: Macmillan. (pp. 364-374). https://doi.org/10.1007/978-1-349-20558-5_29

Pavitt, K. (1984). Sectoral patterns of technical change. Research Policy, 13, 343-373. https://doi.org/10.1016/0048-7333(84)90018-0

Piga, C., & Vivarelli, M. (2004). Internal and external R&D: A sample selection approach. Oxford Bulletin of Economics and Statistics, 66(4), 457-482. https://doi.org/10.1111/j.1468-0084.2004.00089.x

Rapping, L. (1965). Learning and World War II production functions. Review of Economics and Statistics, 47, 81-86. https://doi.org/10.2307/1924126

Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98, 71-102. https://doi.org/10.1086/261725

Siedschlag, I., Zhang, X., & Cahill, B. (2010). The effects of the internationalization of firms on innovation and productivity (ESRI Working Paper).

Stobaugh, R. B., & Townsend, P. L. (1975). Price forecasting and strategic planning: The case of petro chemicals. Journal of Marketing Research, 12, 19-29. https://doi.org/10.1177/002224377501200104

Suárez-Porto, V., & Guisado-González, M. (2014). Analysis of the determinants of exporting intensity in the field of innovation. Investigaciones Europeas de Dirección y Economía de la Empresa, 20(2), 79-86. https://doi.org/10.1016/j.iedee.2013.12.002

Topkis, D. L. (1978). Minimizing a submodular function on a lattice. Operations Research, 26, 305-321. https://doi.org/10.1287/opre.26.2.305

Tsurumi, Y., & Graham, E. M. (1984). Multinational management: Business strategy and government policy. Cambridge, MA: Ballinger Publishing.

Vega-Jurado, J., Gutiérrez-Gracia, A., & Fernández de Lucio, I. (2009). La relación entre las estrategias de innovación: Coexistencia o complementariedad. Journal of Technology Management & Innovation, 4(3), 74-88. https://doi.org/10.4067/S0718-27242009000300007

Wright, T. P. (1936). Factors affecting the cost of airplanes. Journal of the Aeronautical Sciences, 3(4), 122-128. https://doi.org/10.2514/8.155