Openness and Appropriation: Empirical Evidence from Australian Businesses

Author(s)
Huang, Fang
Rice, John
Galvin, Peter
Martin, Nigel
Publication Date
2014
Abstract
The adoption of open innovation creates a dilemma for firms. On one hand, a commitment to openness facilitates the flow of knowledge between firms, with this flow (generally) unconstrained by royalties and other appropriation mechanisms. However, openness has also led to unintended knowledge spillovers, limiting firms' abilities to protect their core knowledge. This dilemma has created a need to consider the relationship between openness and firms' appropriability regimes. In order to explore this "paradox of openness," an investigation of the appropriability regimes adopted by Australian firms through an empirical analysis of innovation-related data from 4 322 businesses was undertaken. It was found that the relationship between two indicators of openness (the breadth of external knowledge sources and the scope of interorganizational collaborations) and the scope of appropriability regimes employed by a firm exhibits a nonlinear inverse-U (n) form. The results also indicated that open innovators actually increase controls on their intellectual property through informal appropriability regimes rather than loosening appropriability mechanisms to promote knowledge spillovers as open innovation theories suggest.
Citation
IEEE Transactions on Engineering Management, 61(3), p. 488-498
ISSN
1558-0040
0018-0391
Link
Publisher
Institute of Electrical and Electronics Engineers (IEEE)
Title
Openness and Appropriation: Empirical Evidence from Australian Businesses
Type of document
Journal Article
Entity Type
Publication

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