Foreign vs. domestic: What determines the origin of Chinese firms’ inward technology licensing?

Jason Li-Ying, Yuandi Wang

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The increasing prominence of cross-border technology sourcing urges us to ask a question: what factors and conditions may influence firms' decisions of sourcing technology domestically or internationally? Research on this topic is scattered in the literature but a comprehensive understanding of these factors and conditions on this issue is still lacking. The aim of this paper thus is to establish a comprehensive framework that integrates factors affecting a firm’s propensity to make technology sourcing decisions regarding foreign or domestic origins of technologies. We identify four distinct categories of factors that are relevant in this respect: (1) technology supplier’s characteristics; (2) technology seeker’s characteristics; (3) features of technology itself; and (4) external contextual factors. We test our hypotheses based on Chinese firms’ inward technology licensing. We found well-established incumbent firms that are export-, and high-tech-oriented with strong absorptive capacity are more likely to in-license foreign technology rather than domestic ones if the in-sourced technology is mature, the technology suppliers have strong desorptive capacity, and the external knowledge environment is innovative.
Original languageEnglish
Title of host publication2012 Academy of International Business Conference proceedings
Number of pages37
Publication date2012
Publication statusPublished - 2012
EventAIB 2012 Annual Meeting - Washington,DC, United States
Duration: 30 Jun 20123 Jul 2012


ConferenceAIB 2012 Annual Meeting
Country/TerritoryUnited States
Internet address


  • Technology sourcing
  • Technology license
  • External knowledge acquisition
  • China


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