INO Seminar

Seminar by Elena Novelli, Bocconi University, Management Department

How do Innovative SMEs commercialize their technology? Investigating the Substitution Effect between Vertical Integration and Cooperation

Abstract

Typical studies on technology commercialization recognize that firms can commercialize their technology either through vertical integration or through cooperation with other firms. However, this conceptualization of technology commercialization cannot account for the recent, tendency of firms to engage simultaneously in both types of technology commercialization options. This paper reframes extant study conceptualization of technology commercialization distinguishing between firms choosing a pure technology commercialization strategy – i.e., firms commercializing their technology either through vertical integration or alternatively through cooperation – and those engaging in a mixed one – i.e., firms engaging simultaneously in both vertical integration and cooperation activities. Building on the resource-based view of the firm, this paper develops a theory of the comparative efficiency of employing a mixed strategy compared to a pure one. This study conducts a cross-sectional empirical investigation on a sample of 497 public innovative Small and Medium Enterprises in the United States in 1996-2001 across multiple industries, testing for the existence of a substitution effect between different commercialization practices. Results show that pure technology commercialization strategies are more efficient than mixed ones.

Paper joint with:

Giovanna Padula, Bocconi University, Management Department.

Rekha Rao, Imperial College.