Contingencies of Profiting from Innovation: Appropriability Mechanisms’ Non-Linearities
35 Pages Posted: 30 Aug 2013
Date Written: July 2, 2013
Abstract
Empirical studies have analyzed the effectiveness of various appropriability mechanisms, and have carved out a number of contingency factors such as industry, country, technology, and commercialization strategy. This literature, however, neglects the strategic possibility that organizations invest to improve an appropriability mechanism contingent on their present position in the same mechanisms. If the respective appropriability mechanism is characterized by non-linearities then, depending on this position, the same investment may be highly effective or largely ineffective. We thus ask, how is the effectiveness of investments in appropriability contingent on the firm‘s current appropriability position? To answer this question, we conducted a choice-based conjoint analysis with 319 participants managing various appropriability mechanisms. We identify significant non-linearities in the effect of appropriability mechanisms, implying that the effect of an improvement in one mechanism is contingent on the innovator‘s current position in this mechanism. These non-linearities, in turn, depend on the innovator‘s competitive position with respect to value capture. Our findings add to explain puzzles resulting from macro-level studies and have implications for firms trying to maximize value appropriation from innovation.
Keywords: profiting from innovation, patents, non-linearities, choice-based conjoint analysis
JEL Classification: O32, O34
Suggested Citation: Suggested Citation