The impact of inward international licensing on absorptive capacity of SMEs

Abstract

Purpose

This study aims to examine the impacts of inward international licensing (IIL) on the absorptive capacity (ACAP) of small and medium enterprises (SMEs) in a developing economy.

Design/methodology/approach

The study is explorative, qualitative and elaborative in nature. Therefore, a multiple case study was selected and performed as the research strategy. The data were collected from four pharmaceutical SMEs licensed from European pharmaceutical large-scale enterprises.

Findings

The results confirm that IIL has a strong effect on acquisition, assimilation, transformation and exploitation as absorptive factors. Furthermore, the results have been enhanced by several contextual factors of ACAP human resources, inter-and intra-firm relationships, internal knowledge and managerial and strategic aspects. These contextual factors have also been influenced by IIL.

Originality/value

From the licensee perspective in a developing context, examining the extant literature on non-equity strategic alliances shows that very few studies have empirically examined the impact of this kind of alliance, such as IIL, on SMEs’ ACAP. On this basis, the study provides evidence that non-equity strategic alliances, particularly IIL, enhance SMEs’ capabilities such as ACAP. In other words, to overcome SMEs’ resource limitations and inadequate capabilities, IIL provides opportunities for them to obtain capabilities and critical resources.

Citation

Reza Saeedi, M., Dadfar, H. and Brege, S. (2014), "The impact of inward international licensing on absorptive capacity of SMEs", International Journal of Quality and Service Sciences, Vol. 6 No. 2/3, pp. 164-180. https://doi.org/10.1108/IJQSS-02-2014-0011