| dc.description.abstract | Outsourcing most of the time is the choice of governance form by managers when it comes to manufacturing or other value-adding activities. One of the primary reasons to do that is cost saving. However, in recent years switching governance form to insourcing from outsourcing has picked up significant attention from researchers in strategic management. Many firms have started to bring back some of the activities in-house in order to have better control over information and knowledge or any kind of trade secrets. Even though there has been some research on this topic, especially outlining the factors that influence the decision to change governance form to insource, the performance outcomes from such changes have not been quantified. In this thesis, we examine this from the perspective of innovation performance. We also tried to understand what kind of role the resources of the firm play in achieving the desired performance from this decision.
We started by conducting a set of descriptive analyses to understand the important characteristics of the variable. We selected the variables that represent resources used for innovation activity and used the combination as a mediator. We later performed linear regression and applied the Sobel test to test for mediation and confirm our hypothesis. From our analyses, we confirmed that the heterogeneity of the acquired resources partially mediates the causal relationship between changing governance form to insource and innovation performance. We also used firm size, level of export, the status of the number of skilled employees, and being part of a bigger firm as control variables to test the significance of the change in governance when explaining the percentage of sales from the main innovative product as innovation performance.
Next, we delved into the composition of the resource portfolio of the firm and examined how different types of resources influence innovation performance in different ways. We used linear regression to test the effect of internal R&D, equipment and machinery, and patent and knowledge-based products as resource acquisition on the percentage of sales from the main innovative product as innovation performance. We found that patent and knowledge-based products give 5 times more performance increases compared to the other two types of firm resources. | |