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Knowledge protection strategies of multinational firms--A cross-country comparison

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  • de Faria, Pedro
  • Sofka, Wolfgang

Abstract

International knowledge spillovers, especially through multinational companies (MNCs), have recently been a major topic of discussion among academics and practitioners. Most research in this field focuses on knowledge sharing activities of MNC subsidiaries. Relatively little is known about their capabilities for protecting valuable knowledge from spilling over to host country competitors. We extend this stream of research by investigating both formal protection strategies (e.g. patenting) as well as strategic ones (secrecy, lead time, complex design). We conceptualize the breadth of firm's knowledge protection strategies and relate it to the particular situation of MNC subsidiaries. Moreover, we argue that their approaches differ with regard to host country challenges and opportunities. We address these issues empirically, based on a harmonized survey of innovation activities of more than 1800 firms located in Portugal and Germany. We find evidence that MNCs prefer broader sets of knowledge protection strategies in a host country with fewer opportunities for knowledge sourcing (Portugal). In Germany, though, they opt for narrower sets of knowledge protection strategies if they invest in innovation activities themselves. We deduce that these results are due to a need for reciprocity in knowledge exchanges to benefit fully from promising host country knowledge flows.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 39 (2010)
Issue (Month): 7 (September)
Pages: 956-968

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Handle: RePEc:eee:respol:v:39:y:2010:i:7:p:956-968

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Web page: http://www.elsevier.com/locate/respol

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Keywords: Knowledge protection Multinational companies Patenting;

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Cited by:
  1. Barros, Henrique M., 2011. "The Effects of Innovation Partnership, Foreign Ownership and Enhanced Management Practices on the Use of Patents in Brazilian Manufacturing," Insper Working Papers wpe_255, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
  2. Alessandra Perri & Raffaele Oriani & Francesco Rullani, 2012. "Does Co-Location Accelerate Knowledge Outflows from FDI? The Role of MNC Subsidiaries' Technology Sourcing Strategies," DRUID Working Papers 12-09, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  3. Joerg Thomae & Volker Zimmermann, 2013. "Knowledge Protection Practices in Innovating SMEs," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 233(5-6), pages 691-717, October.
  4. Perri, Alessandra & Andersson, Ulf & Nell, Phillip C. & Santangelo, Grazia D., 2013. "Balancing the trade-off between learning prospects and spillover risks: MNC subsidiaries’ vertical linkage patterns in developed countries," Journal of World Business, Elsevier, vol. 48(4), pages 503-514.
  5. Alessandra Perri & Raffaele Oriani & Francesco Rullani, 2013. "Knowledge breadth of MNC subsidiaries and the duration of host-country firms' search," Working Papers 7, Department of Management, Università Ca' Foscari Venezia.
  6. Alessandra Perri & Ulf Andersson, 2012. "Knowledge outflows from foreign subsidiaries: The tension between knowledge creation and knowledge protection," Working Papers 18, Department of Management, Università Ca' Foscari Venezia.
  7. García, Francisco & Jin, Byungchae & Salomon, Robert, 2013. "Does inward foreign direct investment improve the innovative performance of local firms?," Research Policy, Elsevier, vol. 42(1), pages 231-244.
  8. Badi H. Baltagi & Peter Egger & Michaela Kesina, 2014. "Sources of Productivity Spillovers: Panel Data Evidence from China," CESifo Working Paper Series 4812, CESifo Group Munich.
  9. Perri, Alessandra & Andersson, Ulf, 2014. "Knowledge outflows from foreign subsidiaries and the tension between knowledge creation and knowledge protection: Evidence from the semiconductor industry," International Business Review, Elsevier, vol. 23(1), pages 63-75.
  10. Christoph Engel & Marco Kleine, 2013. "Who is Afraid of Pirates? An Experiment on the Deterrence of Innovation by Imitation," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2013_07, Max Planck Institute for Research on Collective Goods, revised Nov 2013.

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