Technological similarity and market entry as antecedents of inbound open innovation

Abstract

This paper investigates resource-based, market-based, and imitation-based motives in open innovation (OI) technology sourcing decisions. Using the theoretical foundations of these diverse motives, we identify antecedents related to whether firms source technology from science-based organizations (i.e., universities, government and research institutes) and competitors. Using 307 patent licenses, we found that technological similarity has differing impacts on the choice of science-based organizations and competitors. Our results show that there is an inverted U-shaped relationship between technological similarity and choice of competitors while a U-shaped relationship exists between technological similarity and choice of science-based organizations. We find that when there are a large number of product market entries, firms tend to source technology from competitors. These results confirm that OI partner selections differ based on the firm’s motives.