Effectiveness of technology investment: Impact of internal technological capability, networking and investment's strategic importance

This study considers a firm's technological capabilities and the strategic importance of technology investment as critical factors affecting the effectiveness of technology investment. Drawing upon a sample of 139 Greek manufacturing SMEs the study presents arguments and formulates hypotheses concerning the individual and interaction effects of internal technological capability and networking on technology investment effectiveness. It also examines the direct and moderating effects of strategic importance of technology investment. Results suggest that internal technological capability is a powerful determinant of technology investment effectiveness. Networking appears to complement internal capability creating synergistic effects whereas it cannot act as a substitute of it. Strategic importance of technology investment seems to have an important direct influence. It also moderates positively the relationship between networking and technology investment effectiveness. These results highlight the factors behind successful technological change and provide evidence on the working of “interactive dynamic capabilities” in the context of technology investment.

► Internal technological capability determines technology investment effectiveness.
► Networking is a complement not a substitute of internal capability.
► Strategic importance of technology investment affects investment's effectiveness.
► Strategic importance increases the effects of networking on effectiveness.
► Successful technological change is driven by interactive dynamic capabilities.