A study of the degrees of technology leverage - in-house R&D versus imported technology

This study extends the work of Lia, Hsieh, and Chen (2004) and Lee and Cheng (2007) by presenting a theoretical derivation of degree of technology leverage (DTL). DTL is empirically used to examine the performance of technology strategy for to make (in-house R&D) or buy (external technology) decisions for 332 Taiwanese manufacturing and high-tech firms. The empirical results suggest that imported technology may not be riskier than in-house R&D in terms of DTL. Using external technology as a leverage is beneficial in creating economic profits for firms; however, firms need to use other market competitive strategies in combination with their technology strategies to reap the greatest benefit from new technologies.