Appropriability, Preemption, and Firm Performance

36 Pages Posted: 12 Feb 2007

See all articles by Marco Ceccagnoli

Marco Ceccagnoli

Scheller College of Business at Georgia Tech

Date Written: September 12, 2007

Abstract

The impact of strategies used to appropriate innovation rents on firm performance is analyzed using a sample of U.S. public manufacturing firms. Stronger appropriability at the firm level, achieved through patent protection or the ownership of specialized complementary assets, leads to superior economic performance, as measured by the stock market valuation of a firm's R&D assets. Among commonly used 'non-conventional' patent strategies, preemptive patenting allows incumbents to strengthen their market power. Consistent with theory, such effect is higher for incumbents with higher ex ante market power and facing a higher threat of entry, and lower when R&D competition is characterized by the discovery of drastic innovations.

Keywords: Appropriability, patents, intellectual property, innovation, preemption, competitive advantage

JEL Classification: O31, O32, O33, O34

Suggested Citation

Ceccagnoli, Marco, Appropriability, Preemption, and Firm Performance (September 12, 2007). Available at SSRN: https://ssrn.com/abstract=962523 or http://dx.doi.org/10.2139/ssrn.962523

Marco Ceccagnoli (Contact Author)

Scheller College of Business at Georgia Tech ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

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