Coopetition, formal and informal appropriation mechanisms and the role of environmental dynamism and competition intensity


Firms increasingly engage in coopetition by collaborating with their direct competitors. A major challenge in such cooperative agreements is to avoid unintended knowledge flows to a competing partner. We study how reliance on knowledge protection mechanisms to safeguard intellectual property affects a firm’s decision to engage in coopetition and how industry dynamism and competitive intensity affect this relationship. We put forth that formal and informal protection mechanisms signal different types of innovation and the focal firm’s closeness to the technological frontier. We find that firms’ reliance on formal appropriation mechanisms has a positive association with the propensity to engage in coopetition. External environments, characterized by different levels of dynamism and competitive intensity, moderate the association between the use of appropriation mechanisms and coopetition. In particular, in dynamic and competitive industries, firms are more prone to engage in coopetition when using formal appropriation mechanisms. We argue firms using these mechanisms are in need of partnerships to advance innovation performance and are better protected from the risks inherent to competitor collaboration. The reliance on informal appropriation mechanisms negatively affects the likelihood of coopetition in such environments. We conjecture this signals that firms employing informal mechanisms are more likely to prevent knowledge spillovers to a competitor by avoiding them as partnership candidates.

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