From value creation to value appropriation: How firms exploit disruptive innovation opportunities in emerging economies

Although emerging economies encourage firms to create value through disruptive innovations, less is known about how firms appropriate value from these innovations. Drawing on the profit from innovation (PFI) framework, this study examines how product disruptiveness influences opportunity exploitation and how this relationship is conditioned by appropriability mechanisms and institutional forces. Based on a multi-wave, multi-informant field survey and a scenario-based experiment, we find that product disruptiveness enhances opportunity exploitation by increasing perceived differentiation and perceived attractiveness. This relationship is reinforced by informal appropriability mechanisms and political ties, but diminished by formal appropriability mechanisms and government support. These findings shift attention from value creation to value appropriation in disruptive innovation research and extend the PFI framework by showing that value appropriation from disruptive innovations depends on the fit between appropriability mechanisms, institutional forces, and disruptive innovation trajectories in emerging economies.