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. | |