Focusing the High-Technology Firm: How Outsourcing Affects Technological Knowledge Exploration

Abstract

This study argues and shows that the extent to which high-technology firms focus efforts by outsourcing production, assembly, and logistics activities enhances the extent of technological knowledge exploration. This occurs through three modalities: (1) intensifying the effect of internal R&D efforts on exploration; (2) intensifying the effect of learning from competing partners, through R&D alliances, on exploration; and (3) intensifying the effect of learning from customers on exploration. Empirical analysis of a panel data set of Israeli high-technology firms supports the view that the combination of these three modalities is associated with greater exploration of new technological knowledge.