The paradox of openness and value protection strategies: effect of extramural R&D on innovative performance
File(s)
Accepted version
Author(s)
Wadhwa, A
Bodas-Freitas, I
Sarkar, MB
Type
Journal Article
Abstract
The emphasis in firms on extramural research and development (R&D), involving increased engagement with external entities in the conduct of research, can also result in knowledge leakage. Knowledge leaks can undermine firm competitiveness, and to prevent this, firms deploy various isolating mechanisms to protect their knowledge. Integrating insights from the resource-based view and evolutionary theory, we hypothesize an inverted curvilinear relationship between extramural R&D and innovation and explain why the value protection strategies employed by firms change the relationship at various degrees of external knowledge sourcing. We test our hypotheses on a sample of 506 French manufacturing firms using data from three surveys conducted in the period 1998 to 2006. We find an inverted-U-shaped relationship between extramural R&D and innovation performance. This relationship is moderated by employee retention and secrecy such that the benefits of extramural R&D are weakened at lower degrees of extramural R&D while its downsides are mitigated at higher degrees of extramural R&D. Our work thus suggests boundary conditions to the paradox of openness.
Date Issued
2017-09-01
Date Acceptance
2017-04-03
Citation
Organization Science, 2017, 28 (5), pp.873-893
ISSN
1526-5455
Publisher
INFORMS (Institute for Operations Research and Management Sciences)
Start Page
873
End Page
893
Journal / Book Title
Organization Science
Volume
28
Issue
5
Copyright Statement
Copyright © 2017, INFORMS
Subjects
Social Sciences
Management
Business & Economics
open innovation
value protection strategies
extramural R&D
EXTERNAL KNOWLEDGE ACQUISITION
ABSORPTIVE-CAPACITY
FIRM PERFORMANCE
TECHNOLOGICAL KNOWLEDGE
COMPETITIVE ADVANTAGE
MANUFACTURING FIRMS
EMPIRICAL-ANALYSIS
ESTABLISHED FIRMS
MODERATING ROLE
PRODUCT
1503 Business And Management
1505 Marketing
Business & Management
Publication Status
Published
Date Publish Online
2017-10-03