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Innovation Sourcing Decisions of Hi-Tech Firms: An Embeddedness Perspective

Technological innovations have been increasingly important to a hi-tech firm’s success. Firms often have to decide whether to invest in, form a partnership for, or simply purchase such innovations. While extant research has been dominated by economic perspectives, we regard such innovation sourcing decisions as a firm’s strategic choices that are constrained by its network relationships. From such an embeddedness perspective, we bridge four main areas of research in technology innovation and probe how a firm’s positional and structural embeddedness allows it to have the necessary network capabilities to choose between different innovation sourcing modes. In addition, we argue that this relationship will be further moderated by the firm’s relational embeddedness. We believe this research has significant implications for both theory and practice in hi-tech industries.