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SME’s Appropriability Regime for Sustainable Development-the Role of Absorptive Capacity and Inventive Capacity

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  • HanGyeol Seo

    (School of Business and Technology Management, College of Business, Korea Advanced Institute of Science and Technology, Daejon 34141, Korea)

  • Yanghon Chung

    (School of Business and Technology Management, College of Business, Korea Advanced Institute of Science and Technology, Daejon 34141, Korea)

  • Chungwon Woo

    (Science and Technology Policy Institute, Sejong National Research Complex 370, Sicheong-daero, Sejong-si 30147, Korea)

  • Dongphil Chun

    (Graduate School of Management of Technology, Pukyong National University, 365, Sinseon-ro, Nam-gu, Busan 48547, Korea)

  • Soojeen Sarah Jang

    (School of Business and Technology Management, College of Business, Korea Advanced Institute of Science and Technology, Daejon 34141, Korea)

Abstract

SMEs need to protect their innovation outcomes and increase profits from their innovations in order to make their growth sustainable. The appropriability regime enables SMEs to secure financial returns on their R&D investment so that SMEs can continuously invest in innovation and obtain financial gains. However, the appropriability regime can change the effects of protecting innovation outcomes depending on the capacity of knowledge exploration, especially for SMEs, and previous studies have not discussed these issues. Thus, the main objective of this paper is to explore how the knowledge exploration capacity affects the relationship between different types of appropriability regimes and innovation performance. Multivariate regression is used to analyze the manufacturing SMEs sampled from the Korea Innovation Survey 2007 (KIS 2007). Our results demonstrate that both formal and informal appropriability regimes can improve firm’s innovation performance. Furthermore, although both inventive and absorptive capacity have positive moderating effects on the relationship between the informal appropriability regime and innovation performance, the inventive capacity moderates negatively the relationship between the formal appropriability regime and innovation performance. As a whole, the significance of this paper lies in providing further understanding of the different types of appropriability regimes and knowledge exploration capacity in SMEs.

Suggested Citation

  • HanGyeol Seo & Yanghon Chung & Chungwon Woo & Dongphil Chun & Soojeen Sarah Jang, 2016. "SME’s Appropriability Regime for Sustainable Development-the Role of Absorptive Capacity and Inventive Capacity," Sustainability, MDPI, vol. 8(7), pages 1-16, July.
    • Handle: RePEc:gam:jsusta:v:8:y:2016:i:7:p:665-:d:73965
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