What Makes Foreign Knowledge Attractive to Domestic Innovation Managers?

25 Pages Posted: 18 Sep 2007 Last revised: 26 Aug 2008

See all articles by Wolfgang Sofka

Wolfgang Sofka

Tilburg University; CentER; CIR

Date Written: 2007

Abstract

This study focuses on the early stages of international innovation activities, i.e. the organizational processes through which promising ideas from around the globe are collected and evaluated. We ask: What characteristics make foreign knowledge interesting to domestic R&D managers? We envision this process as a balancing act between direct transaction costs for communication and coordination and indirect transaction costs from overlooking or misinterpreting important global trends. These hypotheses are tested through a conjoint analysis among 158 heads of R&D departments of German high-tech firms. We find that uncertainty avoidance is the most important driver. Radically new ideas from dynamic markets are most attractive and must not be overlooked. Complementarities with existing knowledge stocks and low language barriers are also important but to a lesser degree. Interestingly, we find no distinction between market and technological impulses.

JEL Classification: F23, O31, O32

Suggested Citation

Sofka, Wolfgang, What Makes Foreign Knowledge Attractive to Domestic Innovation Managers? (2007). ZEW - Centre for European Economic Research Discussion Paper No. 07-055, Available at SSRN: https://ssrn.com/abstract=1015224 or http://dx.doi.org/10.2139/ssrn.1015224

Wolfgang Sofka (Contact Author)

Tilburg University ( email )

Netherlands

CentER ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

CIR ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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