International knowledge spillovers, especially through multinational companies (MNCs), have recently been a major topic of the academic and management discussion. However, most studies treat MNC subsidiaries as relatively passive actors without clear knowledge protection strategies. The goal of this study is to extend this stream of research by investigating both market-based (e.g. secrecy, lead time) as well as legal knowledge protection strategies (e.g. patents, trademarks) of MNC subsidiaries. We argue that these strategies are not independent from the opportunities and challenges of the host country. We suggest that the host country leadership status influences the choice of knowledge protection strategies along two major dimensions: geographical and industry strength of host country firms. We test our hypotheses for a broad sample of more than 1,500 firms in Germany. The results indicate that legal forms of knowledge protection are used more restrictively if the host country geographical environment is technologically leading while technological leadership of host country competitors within the industry leads to less restrictive market-based knowledge protection strategies. We develop management recommendations based on these trade-offs between reliable knowledge protection and the need for reciprocity in exchanging knowledge. --
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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number
09-002.
Find related papers by JEL classification: O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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