Proceedings of the 12th European Conference on Knowledge ...

Evgeny Blagov
The first <strong>of</strong> such factors is suggested to be <strong>the</strong> importance <strong>of</strong> <strong>the</strong> knowledge resource involved in <strong>the</strong>
focal transaction for <strong>the</strong> firm’s result as it can lay in <strong>the</strong> foundation <strong>of</strong> <strong>the</strong> comparative bargaining
power advantages between <strong>the</strong> firm and its potential counterparties.
As <strong>the</strong> focal knowledge resource’s importance for <strong>the</strong> firm’s result can be suggested to increase <strong>the</strong>
external transaction costs <strong>of</strong> <strong>the</strong> focal firm, it can be supposed that <strong>the</strong> bigger this importance, <strong>the</strong>
more <strong>the</strong> firm would be inclined to choose <strong>the</strong> technological knowledge renovation sources oriented
on <strong>the</strong> external transaction costs minimization, and, respectively, <strong>the</strong> less inclined to choose <strong>the</strong>
sources oriented on <strong>the</strong> internal transaction costs minimization.
Consequently, such a hypo<strong>the</strong>sis can be suggested about this factor’s influence on <strong>the</strong> choice <strong>of</strong>
technological knowledge renovation variants:
Hypo<strong>the</strong>sis 1:
Increase in focal knowledge resource’s importance for <strong>the</strong> firm’s result would lead to <strong>the</strong>
increase in probability <strong>of</strong> <strong>the</strong> firm’s inclination to create necessary knowledge by own
strength, to acquire <strong>the</strong> necessary knowledge provider and to create a long-term alliance
relationship with <strong>the</strong> necessary knowledge provider (in case <strong>of</strong> increase in <strong>the</strong> ability to
control <strong>the</strong> potential counterparty’s actions) and, in turn, to decrease in probability <strong>of</strong> <strong>the</strong>
firm’s inclination to buy necessary knowledge on <strong>the</strong> open market.
It seems evident that <strong>the</strong> potential counterparties would never have an interest to get involved in a
transaction if <strong>the</strong> object <strong>of</strong> <strong>the</strong> transaction (in this research, <strong>the</strong> technological knowledge resource)
has a zero importance for <strong>the</strong> result <strong>of</strong> each <strong>of</strong> <strong>the</strong>m. Consequently, it can be suggested that <strong>the</strong>
comparative bargaining power <strong>of</strong> <strong>the</strong> focal firm and a (potential) counterparty depends on <strong>the</strong>
comparative degree <strong>of</strong> <strong>the</strong> focal knowledge resource’s importance for <strong>the</strong> economical results <strong>of</strong> each
<strong>of</strong> <strong>the</strong>m. Thus, <strong>the</strong> congruence between <strong>the</strong> transaction parties’ results seems to be an important
factor.
In [Bushman, Penno, Indjejikian, 2000; Datar, 2000] <strong>the</strong> congruence between <strong>the</strong> results <strong>of</strong> <strong>the</strong> focal
firm as a principal and a (potential) counterparty as an agent is divided into such two parts as <strong>the</strong>
congruence being a result <strong>of</strong> <strong>the</strong> principal’s intentional actions and <strong>the</strong> degree being not; an abstract
formulation <strong>of</strong> <strong>the</strong> former is more or less <strong>the</strong> focal firm’s ability to control <strong>the</strong> actions <strong>of</strong> <strong>the</strong> potential
counterparty. When looking on <strong>the</strong> congruence factor from <strong>the</strong> Williamsonian perspective it can be
suggested that <strong>the</strong> increase in <strong>the</strong> results congruence can decrease <strong>the</strong> potential uncertainty in <strong>the</strong>
counterparties’ relationships that must lead to <strong>the</strong> external transaction costs decrease and thus to <strong>the</strong>
increase in <strong>the</strong> firm’s probability to choose <strong>the</strong> technological knowledge renovation variants oriented
on <strong>the</strong> internal transaction costs minimization.
Thus, such a hypo<strong>the</strong>sis can be formulated:
Hypo<strong>the</strong>sis 2:
Increase in <strong>the</strong> congruence <strong>of</strong> results <strong>of</strong> <strong>the</strong> focal firm and a potential counterparty would
lead to <strong>the</strong> increase in probability <strong>of</strong> <strong>the</strong> firm’s inclination to buy necessary knowledge on
<strong>the</strong> open market and to create a long-term alliance relationship with <strong>the</strong> necessary
knowledge provider, and, in turn, to <strong>the</strong> decrease in probability <strong>of</strong> <strong>the</strong> firm’s inclination to
create necessary knowledge by own strength and to acquire <strong>the</strong> necessary knowledge
provider.
Most <strong>of</strong> <strong>the</strong> empirical studies <strong>of</strong> <strong>the</strong> firm boundaries based on <strong>the</strong> Williamsonian framework (see a
comparative analysis <strong>of</strong> such studies in [Geyskens, Steenkamp, Kumar, 2006]) show that <strong>the</strong> factor <strong>of</strong>
<strong>the</strong> framework mostly influential to <strong>the</strong> decision making is <strong>the</strong> asset specificity.
The formulation “asset specificity” is too vague to be used in an empirical study as is, so in most <strong>of</strong> <strong>the</strong>
studies proxies for it are created. In this research such proxies are <strong>the</strong> factors <strong>of</strong> uniqueness <strong>of</strong> <strong>the</strong>
firm’s technological knowledge resources as a whole, <strong>of</strong> <strong>the</strong> knowledge resource involved in a focal
transaction, and <strong>of</strong> <strong>the</strong> firm’s production in comparison with <strong>the</strong> respective market and industry.
These proxies are supposed to have a positive correlation with <strong>the</strong> asset specificity, i.e., <strong>the</strong> increase
in <strong>the</strong>se factors can be explained as <strong>the</strong> increase in specificity <strong>of</strong> assets involved in a (potential)
transaction. Thus it can be suggested that <strong>the</strong> increase in <strong>the</strong> uniqueness set <strong>of</strong> factors would lead to
<strong>the</strong> increase in firm’s probability to choose <strong>the</strong> technological knowledge renovation sources variants
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