The paradox of openness and value protection strategies: Effect of extramural R&D on innovative performance

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Title: The paradox of openness and value protection strategies: Effect of extramural R&D on innovative performance
Author(s): Wadhwa, A
Bodas-Freitas, I
Sarkar, MB
Item Type: Journal Article
Abstract: The e mphasis in firms on extramural research and development ( R&D ) , involv ing 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 i nsights 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 de grees 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 p erformance . This relationship is moderated by employee retention and secrecy such that the benefits of extramural R&D are weakened at low er degrees of extramural R&D while its downside s are mitigated at high er degrees of extramural R&D. Our work thus sugge sts boundary conditions to the paradox of openness.
Publication Date: 3-Oct-2017
Date of Acceptance: 3-Apr-2017
URI: http://hdl.handle.net/10044/1/46248
DOI: https://dx.doi.org/10.1287/orsc.2017.1145
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
Keywords: 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
Appears in Collections:Imperial College Business School
Faculty of Natural Sciences



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