Understanding a Firm’s Openness Decisions in Innovation

36 Pages Posted: 14 Nov 2011

See all articles by Wenzel Drechsler

Wenzel Drechsler

Goethe University Frankfurt

Martin Natter

University of Zurich

Date Written: November 14, 2011

Abstract

The degree of openness in innovation, ranging from closed to multiple levels of openness, is a key strategic decision for managers. Therefore, this study aims to carefully investigate the underlying drivers of openness. A major result of this study is that the degree of openness underlies separate mechanisms for being closed in innovation and higher degrees of openness. The factors that prevent firms from being open are a lack of market and technological knowledge (knowledge gaps), ineffective intellectual property (IP) protection mechanisms, and competitor threats such as market entries and imitation. The most important factors that increase the degree of openness are a firm’s need for financial funding in innovation and the effectiveness of a firm’s IP protection mechanisms.

Keywords: Open innovation, degree of openness, innovation cooperation, decision structure, resource-based view

JEL Classification: Q32

Suggested Citation

Drechsler, Wenzel and Natter, Martin, Understanding a Firm’s Openness Decisions in Innovation (November 14, 2011). Journal of Business Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1959316

Wenzel Drechsler (Contact Author)

Goethe University Frankfurt ( email )

Grueneburgplatz 1
R&W Building
Frankfurt, 60323
Germany

Martin Natter

University of Zurich ( email )

Plattenstrasse 14
Zurich, CH-8032
Switzerland
0041446341307 (Phone)

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