How to Appropriate Value in Formal and Informal Open Innovation

A Perspective of Strong Ties and Weak Ties

Xiguang Chen, Huiying Zhang, Michael J. Mol

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

Open innovation has been a paradigm to explore new opportunities and develop new products, enabling firms to use appropriation strategies like patent and secrecy to capture value. Building on strong ties and weak ties, this paper analyzes how formal and informal open innovation activities influence the use of patent and secrecy. We argue that strong ties and weak ties are the way they govern relationships in formal partnering and informal working. Our analysis is based on the bivariate and univariate probit model. Employing a sample of 764 manufacturing firms in an innovation survey, the results suggest that firms appropriate value from formal open innovation through patent, whereas appropriate value from informal open innovation through secrecy. We further find that formal open innovation help realize the new ideas generated from informal open innovation, whose interaction results in the highest level of innovation outcome and therefore maintain it secrecy to gain lead-time advantage and market share. The findings contribute to the understanding of the tension between openness and appropriation from the perspective of ties, provide some evidence, as well as have implications for firms who are active in open innovation.
Original languageEnglish
Publication date2019
Number of pages40
Publication statusPublished - 2019
EventDRUID19 Conference - Copenhagen Business School, Frederiksberg, Denmark
Duration: 19 Jun 201921 Jun 2019
Conference number: 41
https://conference.druid.dk/Druid/?confId=59

Conference

ConferenceDRUID19 Conference
Number41
LocationCopenhagen Business School
CountryDenmark
CityFrederiksberg
Period19/06/201921/06/2019
Internet address

Keywords

  • Formal open innovation
  • Informal open innovation
  • Strong ties
  • Weak ties
  • Patent
  • Secrecy

Cite this

Chen, X., Zhang, H., & Mol, M. J. (2019). How to Appropriate Value in Formal and Informal Open Innovation: A Perspective of Strong Ties and Weak Ties. Paper presented at DRUID19 Conference, Frederiksberg, Denmark.
Chen, Xiguang ; Zhang, Huiying ; Mol, Michael J. / How to Appropriate Value in Formal and Informal Open Innovation : A Perspective of Strong Ties and Weak Ties. Paper presented at DRUID19 Conference, Frederiksberg, Denmark.40 p.
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Chen, X, Zhang, H & Mol, MJ 2019, 'How to Appropriate Value in Formal and Informal Open Innovation: A Perspective of Strong Ties and Weak Ties' Paper presented at, Frederiksberg, Denmark, 19/06/2019 - 21/06/2019, .

How to Appropriate Value in Formal and Informal Open Innovation : A Perspective of Strong Ties and Weak Ties. / Chen, Xiguang; Zhang, Huiying; Mol, Michael J.

2019. Paper presented at DRUID19 Conference, Frederiksberg, Denmark.

Research output: Contribution to conferencePaperResearchpeer-review

TY - CONF

T1 - How to Appropriate Value in Formal and Informal Open Innovation

T2 - A Perspective of Strong Ties and Weak Ties

AU - Chen, Xiguang

AU - Zhang, Huiying

AU - Mol, Michael J.

PY - 2019

Y1 - 2019

N2 - Open innovation has been a paradigm to explore new opportunities and develop new products, enabling firms to use appropriation strategies like patent and secrecy to capture value. Building on strong ties and weak ties, this paper analyzes how formal and informal open innovation activities influence the use of patent and secrecy. We argue that strong ties and weak ties are the way they govern relationships in formal partnering and informal working. Our analysis is based on the bivariate and univariate probit model. Employing a sample of 764 manufacturing firms in an innovation survey, the results suggest that firms appropriate value from formal open innovation through patent, whereas appropriate value from informal open innovation through secrecy. We further find that formal open innovation help realize the new ideas generated from informal open innovation, whose interaction results in the highest level of innovation outcome and therefore maintain it secrecy to gain lead-time advantage and market share. The findings contribute to the understanding of the tension between openness and appropriation from the perspective of ties, provide some evidence, as well as have implications for firms who are active in open innovation.

AB - Open innovation has been a paradigm to explore new opportunities and develop new products, enabling firms to use appropriation strategies like patent and secrecy to capture value. Building on strong ties and weak ties, this paper analyzes how formal and informal open innovation activities influence the use of patent and secrecy. We argue that strong ties and weak ties are the way they govern relationships in formal partnering and informal working. Our analysis is based on the bivariate and univariate probit model. Employing a sample of 764 manufacturing firms in an innovation survey, the results suggest that firms appropriate value from formal open innovation through patent, whereas appropriate value from informal open innovation through secrecy. We further find that formal open innovation help realize the new ideas generated from informal open innovation, whose interaction results in the highest level of innovation outcome and therefore maintain it secrecy to gain lead-time advantage and market share. The findings contribute to the understanding of the tension between openness and appropriation from the perspective of ties, provide some evidence, as well as have implications for firms who are active in open innovation.

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KW - Informal open innovation

KW - Strong ties

KW - Weak ties

KW - Patent

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KW - Informal open innovation

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KW - Weak ties

KW - Patent

KW - Secrecy

M3 - Paper

ER -

Chen X, Zhang H, Mol MJ. How to Appropriate Value in Formal and Informal Open Innovation: A Perspective of Strong Ties and Weak Ties. 2019. Paper presented at DRUID19 Conference, Frederiksberg, Denmark.