Concealing or revealing? Alternative paths to profiting from innovation

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Concealing or revealing? Alternative paths to profiting from innovation. / Hallberg, Niklas Lars; Brattström, Anna.

In: European Management Journal, Vol. 37, No. 2, 2019, p. 165-174.

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TY - JOUR

T1 - Concealing or revealing? Alternative paths to profiting from innovation

AU - Hallberg, Niklas Lars

AU - Brattström, Anna

PY - 2019

Y1 - 2019

N2 - According to the resource-based view, knowledge concealing is fundamental for firms’ ability to prevent competitor imitation and profit from innovation. Open innovation scholars have recently challenged this idea, proposing instead that knowledge revealing can foster industry-wide collaboration and enhance the value of innovation. Reconciling these two perspectives requires a more detailed understanding about the tradeoffs between concealing and revealing. In this paper, we therefore develop a model that outlines the effects of knowledge revealing on the i) value of innovation, ii) the price of products stemming from the innovation, iii) the comparative cost of innovation, as well as the relevant moderators of these effects. Our analysis shows that knowledge revealing may have a positive effect on profits when there are strong indirect network effects; when firms are protected from imitation by causal ambiguity, complementary assets, and intellectual property; and when the innovating firm faces high technological uncertainty. Implications for the resource-based view and research on open innovation are outlined.

AB - According to the resource-based view, knowledge concealing is fundamental for firms’ ability to prevent competitor imitation and profit from innovation. Open innovation scholars have recently challenged this idea, proposing instead that knowledge revealing can foster industry-wide collaboration and enhance the value of innovation. Reconciling these two perspectives requires a more detailed understanding about the tradeoffs between concealing and revealing. In this paper, we therefore develop a model that outlines the effects of knowledge revealing on the i) value of innovation, ii) the price of products stemming from the innovation, iii) the comparative cost of innovation, as well as the relevant moderators of these effects. Our analysis shows that knowledge revealing may have a positive effect on profits when there are strong indirect network effects; when firms are protected from imitation by causal ambiguity, complementary assets, and intellectual property; and when the innovating firm faces high technological uncertainty. Implications for the resource-based view and research on open innovation are outlined.

KW - selective revealing

KW - open innovation

KW - resource-based view

KW - value appropriation

KW - value creation

U2 - 10.1016/j.emj.2018.04.003

DO - 10.1016/j.emj.2018.04.003

M3 - Article

VL - 37

SP - 165

EP - 174

JO - European Management Journal

T2 - European Management Journal

JF - European Management Journal

SN - 1873-5681

IS - 2

ER -