Michael A. Stanko

Controversy in Innovation Outsourcing Research: Review, Synthesis and Future Directions

There is a growing stream of research into the outsourcing of innovation activities within the innovation, management, marketing and economics disciplines. Understandably, this coincides with the practice becoming more commonplace in industry. Here, we attempt to synthesize research surrounding the question of whether to outsource or internalize innovation activities and the performance implications of this decision. Support for both transaction cost and resource-based arguments is examined, with both theory bases showing substantial attention from both case-based and empirical research. As innovation outsourcing research has progressed, several controversies have emerged in the literature and remain unresolved. For instance, case-based research provides evidence that outsourcing innovation activities can lead to faster product development and cost savings; yet, empirical research shows that outsourcing may lead to higher costs and slower new product development. Further, the role of technological uncertainty may have two distinct and conflicting impacts on the outsourcing decision that are not yet well understood. Thus, we present an integrated, timely review of innovation outsourcing research and identify several areas that necessitate future research projects.

An Assessment of the Use of Structural Equation Modeling in International Business Research

Structural equation modeling (SEM) is a powerful multivariate statistical technique that requires careful application. The use of SEM in international business research has substantially increased recently, necessitating a critical evaluation of its use in the field. Through an analysis of 148 articles in the international business (IB) literature, we detail the state of current use of SEM in IB research and compare its use to the established best practices. In many instances, SEMs use in IB has been faulty, suggesting that authors may have drawn incorrect conclusions. To expand the IB fields knowledge base, methodological accuracy is essential. Based on our review of the techniques use in IB research coupled with the established practices in the social science literature, we provide practical suggestions for better applying SEM in the IB literature.