International knowledge sourcing: Evidence from U.S. firms expanding abroad

Wilbur Chung, Stephen Ross Yeaple

Research output: Contribution to journalArticlepeer-review

83 Scopus citations

Abstract

Recent research demonstrates that firms, motivated by national differences in technical activity, expand abroad to source unique knowledge. Extant research suggests that firms use a knowledge sourcing strategy to 'catch up' with competitors and to obtain 'technical diversity.' We widen the investigation by suggesting that firms also use knowledge sourcing as a springboard to reduce their next generation R&D costs-that firms would seek out similar R&D activity to combine with their own. Using unique data that encompasses the multitude of countries where U.S. firms invest, we test the importance of these explanations. Measuring knowledge via patent stocks, we find that country-industries with larger stocks and greater technical similarity to the United States are more attractive. These findings suggest that an important explanation for firms investing abroad is not catching up or technologically diversifying, but is using similar R&D efforts of others to overcome fixed R&D cost hurdles.

Original languageEnglish (US)
Pages (from-to)1207-1224
Number of pages18
JournalStrategic Management Journal
Volume29
Issue number11
DOIs
StatePublished - Nov 1 2008

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Strategy and Management

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