How does technology catch-up experience affect innovation performance of latecomer firms?: Evidence from the Korea pharmaceutical industry

ABSTRACT

Drawing on the technological learning model of latecomer firms (LCFs) and the literature on catch-up, this paper examines how accumulated internal R&D investment, foreign technology in-licensing experience, and creative imitation experience independently and interactively affect innovation by LCFs. We showed that LCFs’ accumulated internal R&D investment and creative imitation experience have a positive impact on their innovation, respectively. However, LCFs’ creative imitation experience weakens the positive relationship between accumulated internal R&D investment and innovation, implying the paradoxical effect of LCFs’ creative imitation strategy on their innovation. Using the unique panel dataset on drugs developed by Korean pharmaceutical firms between 1999 and 2019, we find evidence that generally supports our hypotheses.

KEYWORDS:

• Creative imitation
• innovation
• latecomer firms (LCFs)
• technological catch-up
• technology licensing

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by the Laboratory Program for Korean Studies through the Ministry of Education of the Republic of Korea and the Korean Studies Promotion Service of the Academy of Korean Studies [Grant AKS-2018-LABORATORY-1250001] and the Institute of Management Research, Seoul National University.

Notes on contributors

Byungjun Min

Byungjun Min is a senior researcher at the Hyundai Motor Group Business Intelligence Institute. He received his Ph.D. at Seoul National University, Republic of Korea. His main research area includes catch-up strategies of laggard companies and innovation.

Yujin Kim

Yujin Kim is an assistant professor at Sogang University. She received her Ph.D. at UC Berkeley and worked in the School of Entrepreneurship and Management, ShanghaiTech University. Her research area lies in the field of innovation and entrepreneurship.

Jaeyong Song

Jaeyong Song is AMOREPACIFIC professor at Seoul National University. He was elected as a Fellow of the Academy of International Business. He served as the Chair of the International Management Division, Academy of Management and an editor of Journal of International Business Studies (JIBS). He received his Ph.D. at Wharton and was a professor at Columbia. His papers were published in Management Science, Harvard Business Review, Strategic Management Journal, Organization Science, JIBS, and Research Policy.