Technology acquisition among Korean and Taiwanese firms in the United States

Abstract

This paper adopts a resource-based view (RBV) to illuminate the technology and/or innovation acquisition processes of Taiwanese and South Korean firms that have invested directly in the United States (US). Specifically, it shows that inward investment to the US by Asian firms reflects a strategy of resource renewal and expansion. Further technological resource acquisition is driven by a reverse product cycle model that emphasizes incremental innovations. Survey data from a sample of Taiwanese and South Korean firms points to significant differences in the technology acquisition processes that characterize these Asian investors. The US appears to be a more important source of knowledge for resource acquisition among Taiwanese firms (these firms are typically smaller and younger than their South Korean counterparts). Further, ordered probit regression reveals that Taiwanese firms are more likely to develop technological competency from local basic research, whereas South Korean firms are more likely to build technological competency from applied research and market-derived knowledge. For reasons we discuss in the concluding section, it is unclear if such a strategy of resource acquisition will lead to long-term competitive advantage on a sustained basis.