Do technology alliances benefit technological diversification? The effects of technological knowledge distance, network centrality and complementary assets

Abstract

This study suggests that decisions regarding the scope of a technology base can be traced to factors (technological knowledge (TK) distance, network centrality and complementary assets) that govern the extent of technological specialization and diversification. Based on data from 2000–2007, for 248 electronics and information technology firms in Taiwan, we indicate that technology alliances do not encourage firms to diversify a technology base over time. Decisions in regards to the utilization of external TK can also be traced to TK distance, network centrality and complementary assets. First, TK distance has an inverted U-shaped relationship with the technology base scope. Second, the mere consideration of network centrality and TK distance cannot determine the technology base scope. Third, a firm converges its technology base through combined complementary assets with TK distance and network centrality.

Keywords:

• technology alliance
• technological diversification
• technological knowledge distance
• network centrality
• complementary assets

Acknowledgements

This study benefited from the suggestions of the Editor-in-Chief Kong-Rae Lee and the anonymous reviewers. We would like to gratefully acknowledge the financial support for this research from the NSC, Taiwan (NSC100-2410-H-024-022-).