Higher order technological learning, strategic assets, core capabilities, and market performance in technology-driven firms: an empirical study

Summary form only given. This study explores the link between higher and lower order technological learning processes and firm market performance (profitability) via firm strategic assets creation and core capabilities deployment. The model used is one where technological learning facilitates technology transfer which enhances the firms strategic assets and core capabilities thus potentially increasing firm profitability. The theoretical concepts of higher and lower order technological learning are established, its dual nature as technical and administrative learning is defined, and its role in strategic assets and core capabilities development is examined. Technological learning is the medium or "tool" for facilitating and managing technology transfer and is defined as the process by which a technology-driven firm creates, renews, and upgrades its latent and enacted capabilities based on its stock of explicit and tacit resources. Qualitative findings on technological learning are correlated to the quantitative evidence, namely firm profitability data that cover the time period examined (1970-95). The quantitative analysis is based on correlation and therefore evidence of relationships between the levels of learning and profitability as well as between the levels of learning and changes in profitability due to a learning effect. The hypotheses testing based on our empirical data indicates that the levels of learning do not have any significant correlation to profitability. The paper attempts to define further research on the topic as well as reasons to explain these phenomena.