Marginal effect and mechanism of technology insertion

An empirical study on external knowledge network formation and R&D capability

Abstract

The Japanese petrochemical industry has acquired a competitive advantage from self-development technologies, based on a number of technology insertion. This study demonstrates the influence of technology insertion on research and development (R&D) capability. The study employs network analysis and statistical analysis using data from 2009 and 2013 for technology insertion in the petrochemical industry. The results show that technology insertion positively affect R&D capability. Furthermore, the results also demonstrate a marginal effect of technology insertion on R&D capability. The effect of external knowledge network efficiency in firms' networks that have similar technology insertion on R&D capability is also marginal. This research demonstrates the mechanism of the result through the existence of technological knowledge transfers in the external knowledge network.