Theories Of Interfirm Knowledge Acquisition

Theory suggests that, even though the firm itself is a great source of knowledge used for innovation, few organizations can generate all the knowledge internally and many rely on external sources (Song, Almeida, & Wu, 2001). In theory, a company can seek external knowledge from various stakeholders: suppliers, clients, external consultants or universities and governmental agencies or even competitors. However, since in many cases, knowledge is tacit by nature and embedded into firms, it is often a difficult task to acquire that kind of knowledge.
Mowery et al. (1998) point out that strategic alliances and merges and acquisitions may be used in order to develop firm’s technological capabilities externally. Some scholars indicate the advantages

The degree of technological similarity between current and previous firm of an engineer may matter a lot when it comes to understanding possible level of interfirm knowledge transfer. On the one hand, Mowery et al. (1998) suggest that two firms with significant technological overlap have not much to learn from each other. Therefore, if two firms are technologically more distant from each other, it might mean that a hiring firm can get a drastically new knowledge, which is the case in our research. Hardware-centered consumer electronics companies may appreciate inventor’s knowledge from software-centered companies since the former totally lacking of the capabilities of the latter and will be having more incentives to learn about the technologies, which were untapped

The level of knowledge gained from hired engineer’s previous firm increases at first and then decreases as the technological overlap between hiring and engineer’s previous firm increases.
Team effects on knowledge acquisition and learning-by-hiring. Knowledge-intensive work is often organized around project teams. Teamwork setting at the workplace, characterised by proximity and frequent interaction, facilitates transfer of tacit knowledge among team members, which is not the case for relatively more indepent working employees. Weick and Roberts (1993) showed that colleagues who work in teams that require seamless integration of their knowledge and skills develop a "collective mind". Teamwork allows bringing together colleagues with different but related areas of expertise for exchanging information they would not otherwise encounter that will facilitate innovation process and production of complex knowledge (Galbraith, 1977).
HYPOTHESIS 2A. Employing a team of engineers increases production of knowledge spillovers (compared with knowledge spillovers produced by an individual engineer).
If digging deeper into the subject, in case when an engineer moves from one company to another, he will likely lose the firm-specific knowledge coming from close collaboration with his colleagues (Becker,