The technology sourcing effect on value of new product innovation

New product innovations (NPI) continuously are vital for organizational sustained competitive advantage. Due to the nature of R&D intensity and multidisciplinary in the high-technology industry, it is difficult to develop new products by a single firm. Firms rely on external technological resources necessarily through several ways to maintain their pipeline of products, e.g., merger and acquisition (M&A), strategic alliance, or licensing. Previous studies have discussed the magnitude of market response when an innovation disclosed, but rare research deal with the technology origins of the NPI. This current study fulfills the gap between knowledge sourcing and value of new product innovation. In this current study, we attempt to interpret the performance of new product innovation by two distinct effects which are derived from technology sourcing modes: the value creation effect and the value appropriability effect. Value creation effect derived from studies of organization learning and suggests that the integration of technology sourcing will enhance value of NPI and firm performance. By contrast, following the perspective of property rights, lacking of power to control the ownership of technology will undermine the appropriability of firm and eventually decrease value of NPI.