Sourcing Technological Knowledge Through Foreign Inward Licensing to Boost the Performance of Indian Firms: The Contingent Effects of Internal R&D and Business Group Affiliation

Sourcing technological knowledge from abroad is becoming a popular strategy among emerging market firms (EMFs). Combining the Knowledge-Based View and the Resource Dependence Theory, we argue that augmenting technological knowledge through foreign licensing enables EMFs to access state-of-the-art technological knowledge, reduce operational costs and risks associated to the innovation process, and develop a knowledge-based competitive advantage, ultimately boosting their financial performance. Using data about Indian firms observed from 2001 to 2013, we find that firms with a higher share of foreign inward technology licenses report better financial performance. However, the positive impact of technological knowledge accessed through inward licensing on firm performance is contingent upon: (1) the internal knowledge developed through R&D activity, and (2) the affiliation with business groups. While Indian firms with higher level of internal R&D are able to better leverage the value of foreign technological knowledge, thus reaching higher performance, firms affiliated to business groups gain fewer benefits from licensed foreign technological knowledge than non-business-group affiliated firms

Interplay of patents and trademarks as tools in economic competition

Integrated manufacturing-service systems have been receiving attention recently. The phenomenon of services-to-artifacts companies, namely those specializing in intermediate goods and complex equipment, is increasingly instrumental for long-run competitiveness in fast-changing, high-quality global markets. The debate has so far has remained largely qualitative, and the effective role and relevance of services is rather fuzzy. Against this background, this chapter brings in empirical evidence concerning the evolving business models of a variety of leading innovative manufacturing companies. For this purpose, over 50 manufacturing companies listed in the European Union (EU) research & development (R&D) investment scoreboard are analyzed in terms of patents and trademarks. In particular, trademark strategies are studied in greater depth, and they are sub-divided into goods and services marks and into high and low sophistication. Service marks are used as a supplement to patents, as the service component of industrial offerings is not covered by classic indicators of technical change. The economic data from the EU (EU Scoreboard R&D, sales, growth, employees, profits, or investment) are linked to the patent and trademark data in order to see which balance of goods and service capabilities leads to favorable economic results