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Some like it free: Innovators' Strategic use of Disclosure to slow down Competition

Author

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  • Gonçalo Pacheco‐de‐Almeida
  • Peter B. Zemsky

Abstract

Why do some innovators freely reveal their intellectual property? This empirical puzzle has been a focal point of debate in the R&D literature. We show that innovators may share proprietary technology with rivals for free—even if it does not directly benefit them—to slow down competition. By disclosing IP, innovators indirectly induce rivals to wait and imitate instead of concurrently investing in innovation, which alleviates competitive pressure. In contrast with the classical strategy view, our paper also shows that imitators may not always benefit from interfirm knowledge spillovers. Specifically, imitators may want to limit the know‐how that they can freely appropriate from innovators. Otherwise, innovators have fewer incentives to quickly develop new technologies, which, ultimately, reduces the pace and profits of imitation. Copyright © 2011 John Wiley & Sons, Ltd.

Suggested Citation

  • Gonçalo Pacheco‐de‐Almeida & Peter B. Zemsky, 2012. "Some like it free: Innovators' Strategic use of Disclosure to slow down Competition," Strategic Management Journal, Wiley Blackwell, vol. 33(7), pages 773-793, July.
    • Handle: RePEc:bla:stratm:v:33:y:2012:i:7:p:773-793
    DOI: 10.1002/smj.971
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    Cited by:

    1. Wenjie Tang & Tong Wang & Wenxin Xu, 2022. "Sooner or Later? The Role of Adoption Timing in New Technology Introduction," Production and Operations Management, Production and Operations Management Society, vol. 31(4), pages 1663-1678, April.
    2. Sauermann, Henry & Roach, Michael, 2014. "Not all scientists pay to be scientists: PhDs’ preferences for publishing in industrial employment," Research Policy, Elsevier, vol. 43(1), pages 32-47.
    3. Bin Hu & Yunke Mai & Saša Pekeč, 2020. "Managing Innovation Spillover in Outsourcing," Production and Operations Management, Production and Operations Management Society, vol. 29(10), pages 2252-2267, October.
    4. Mark D. Packard & Brent B. Clark & Peter G. Klein, 2017. "Uncertainty Types and Transitions in the Entrepreneurial Process," Organization Science, INFORMS, vol. 28(5), pages 840-856, October.
    5. You, Jing & Imai, Katsushi S. & Gaiha, Raghav, 2016. "Declining Nutrient Intake in a Growing China: Does Household Heterogeneity Matter?," World Development, Elsevier, vol. 77(C), pages 171-191.
    6. Noriaki Matsushima & Laixun Zhao, 2015. "Strategic dual sourcing as a driver for free revealing of innovation," ISER Discussion Paper 0936, Institute of Social and Economic Research, Osaka University.
    7. Zhang, Yanfang, 2022. "Competitive investments between basic R&D and applied R&D with information spillovers," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 707-722.
    8. Zhixi Wan & Brian Wu, 2017. "When Suppliers Climb the Value Chain: A Theory of Value Distribution in Vertical Relationships," Management Science, INFORMS, vol. 63(2), pages 477-496, February.
    9. Frank Nagle, 2018. "Learning by Contributing: Gaining Competitive Advantage Through Contribution to Crowdsourced Public Goods," Organization Science, INFORMS, vol. 29(4), pages 569-587, August.
    10. Hart E. Posen & John S. Chen, 2013. "An Advantage of Newness: Vicarious Learning Despite Limited Absorptive Capacity," Organization Science, INFORMS, vol. 24(6), pages 1701-1716, December.
    11. Noriaki Matsushima & Laixun Zhao, 2018. "Technology spillovers and outside options in a bilateral duopoly," ISER Discussion Paper 1039, Institute of Social and Economic Research, Osaka University.
    12. Berger, Elisabeth S.C. & Wenzel, Matthias & Wohlgemuth, Veit, 2018. "Imitation-related performance outcomes in social trading: A configurational approach," Journal of Business Research, Elsevier, vol. 89(C), pages 322-327.
    13. Jurgen Poesche & Taina Pihlajarinne & Anette Alén-Savikko & Timo Nyberg & Ilkka Kauranen, 2019. "Decentralized Production: The Need for Social Norms-Based Intellectual Property?," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(02), pages 1-18, April.
    14. He, Jing & Lee, Dongyoung, 2023. "Say more to return less? Disclosure subsequent to successful technological innovation," Journal of Empirical Finance, Elsevier, vol. 70(C), pages 403-426.
    15. Cappelli, Riccardo & Corsino, Marco & Laursen, Keld & Torrisi, Salvatore, 2023. "Technological competition and patent strategy: Protecting innovation, preempting rivals and defending the freedom to operate," Research Policy, Elsevier, vol. 52(6).
    16. Douglas P. Hannah & Ron Tidhar & Kathleen M. Eisenhardt, 2021. "Analytic models in strategy, organizations, and management research: A guide for consumers," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 329-360, February.
    17. Erdem Dogukan Yilmaz & Ivana Naumovska & Milan Miric, 2023. "Does imitation increase or decrease demand for an original product? Understanding the opposing effects of discovery and substitution," Strategic Management Journal, Wiley Blackwell, vol. 44(3), pages 639-671, March.
    18. 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.

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