Cross-Border Organizational Strategies for Knowledge Appropriation: Codified and Complex Technologies

Appropriating returns to R&D is a crucial concern for firms conducting R&D under weak intellectual property rights regimes. To safeguard against such risks, firms can resort to an internal collaboration strategy in which technologies are developed in cross-border inventor teams. We argue that the adoption of such organizational strategies depends on the characteristics of the technology: its codifiability and complexity. We develop and test a framework in which the adoption of organizational strategies for appropriation is a function of excludability and imitability, with technology characteristics influencing imitability and misappropriation risks. Our patent level study of cross-border internal collaboration strategies by 613 foreign R&D establishments of 101 leading MNEs suggests strong technological boundary conditions to the use of organizational strategies to deal with intellectual property risks abroad.