The Role Of Internal R&D Efforts Toward Company’s Absorptive Capacity

Abstract

In the business world, a company’s proprietary of technology is a very important infrastructure in helping gaining the profit. In order to reduce expensive research expenses, today business trend tend to push managerial to switch from developing its own technology to adopting third party technology. This conversion also helps stimulating innovation to fill requirements which will improve performance at the end. And the success of an external technology acquisition is determined by the accumulation of absorptive capacity of the company itself. This paper proposed a model that demonstrated the role of internal R&D’s effortss towards company’s Absorptive capacity to increase the successful of external technology acquisition.