When does tapping external sources of knowledge result in knowledge integration?

This study offers theory and evidence to demonstrate that the time it takes a firm to integrate external sources of information depends on the attributes of the knowledge source and firm's own internal capabilities. By assessing innovative activities by 456 dedicated U.S. biotechnology firms between 1973 and 2003, this article shows that the rate of knowledge integration depends on the type of knowledge source (R&D alliance vs. scientist recruitment) and the degree of familiarity with the knowledge transferred. However, these relationships also are moderated by the degree of prior experience. Specifically, prior experience in forming R&D alliances and recruiting scientists from other firms significantly reduces the time it takes for firms to integrate distal knowledge. The results offer insights into the challenges of developing combinative capabilities by forming R&D alliances and hiring scientific personnel.