High-technology enterprises are increasingly developing their technological advantages in foreign countries. In\ndoing so, they need to make the decision whether to organize the R and D activity inside the organization or outside\nthrough alliance. The perceived assumption suggests that technological complexity dictates the internal organization\nof the R and D activity. However, emerging evidence suggests that technological complexity induces external alliance\nfor the transformation of the organizational knowledge to new product. We test this proposition that there is a positive\ncorrelation between technological complexity and the external alliance of the firm. The hypotheses find support that\ncomplexities of (i) Scale, (ii) Scope, (iii) Intra-clusters and (iv)Inter-cluster of the patent claims predict external alliance.\nHowever, the odds of the external alliance are not in a linear manner. Rather, the odds of these predictors are high, low\nand high again. The article discusses theoretical and practical implications.
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