Make or Buy New Technology – a CEO Compensation Contract’s Role in a Firm’s Route to Innovation

Abstract

Firms obtain new technology either through internal R&D or through acquisitions. These two approaches are usually labeled as “make” and “buy” strategies. In this paper, I examine the relation between a firm’s choice of “make” or “buy” and the performance measures used in the firm’s CEO compensation contract. I focus on the two major differences between… (More)

8 Figures and Tables