Firm Heterogeneity and Learning by Technology Licensing : Empirical Evidence from China

Firm heterogeneity lies at the heart of the resource-based view of the firm in explaining a firm’s innovation success. However, these studies focus on one or two limited perspectives of heterogeneity and more or less neglect the different learning mechanisms by which heterogeneous resources contribute to firms’ success in innovation. In this study, we extend the perspectives of firm heterogeneity into five angles and carefully examine how these different aspects contribute to a firm’s learning experiences, and consequently result in its innovation success. We set our study context under the newly identified external learning mechanism - learning through technology licensing. Using a dataset of 186 Chinese firms during the period 2002-2003 we test five hypotheses in relation to the link between a recipient firm’s heterogeneity, learning experience and its innovation output. The empirical findings indicate that various perspectives of firm heterogeneity can be jointly used to explain a firm’s learning experience and innovation output. That is, a firm with a longer history, stronger pre-existing technological strengths and integrative capabilities, larger scale, and a stronger orientation for foreign knowledge sourcing are better positioned for learning through their technology licensing-ins, and thus achieve superior innovation performance