SEMICONDUCTOR FIRM STRATEGIES AND TECHNOLOGICAL COOPERATION: A TRANSACTION COST APPROACH

The purpose of this dissertation is to ascertain whether the strategy of a semiconductor firm determines its degree of technological cooperation or at least its managers' perception of the costs entailed in sharing technology with another firm. Based on the transaction cost theoretical framework, it is hypothesized that the more product specialized, vertically integrated or innovative a semiconductor firm is, the higher the transaction costs it incurs, and the less it shares its technology with another firm. The transaction costs examined here include search, negotiation, monitoring, engineering manpower, and legal costs and the fear of losing control over proprietary technology. The measures of technology sharing utilized in this study are the number of product or process technology licenses and the extent of R&D manpower sharing.;The results did not support the hypothesized negative relationship between strategy and technological cooperation. However, they confirmed the predicted positive relationships both between product specialization and the fear of losing control and between vertical integration and monitoring costs. Analysis of variance revealed that moderately product specialized firms encounter higher search, negotiation, monitoring and legal costs than do other firms. The ANOVA results also revealed that moderately vertically integrated firms encounter lower engineering manpower and legal costs and fear of losing control. However, contrary to expectation, innovative firms perceive lower legal enforcement costs.;The results suggest that although managers of product specialized and vertically integrated firms perceive high technology transaction costs, this does not inhibit them from sharing technology. It is recommended that the theory incorporate benefits (as well as costs) of technology transactions to increase its explanatory power. Other relevant findings: (1) firms which expect to excel in innovative performance in three years share R & D manpower more; (2) Japanese firms share technology less than US or European firms; and (3) firms which utilize product cross licensing more also report higher fear of losing control and legal enforcement costs.;A questionnaire was sent to R&D managers or presidents of semiconductor firms in the US, Europe and Japan. 52 usuable questionnaires were received for a 38% response rate. Correlational, ANOVA and regression analyses (Grouped Data, Probit or Ordered Probit as appropriate) were performed.