Knowledge protection strategies of multinational firms: A cross-country comparison

P. de Faria, W.E.J. Sofka

Research output: Contribution to journalArticleScientificpeer-review

Abstract

International knowledge spillovers, especially through multinational companies (MNCs), have recently been a major topic of discussion among academics and practitioners. Most research in this field focuses on knowledge sharing activities of MNC subsidiaries. Relatively little is known about their capabilities for protecting valuable knowledge from spilling over to host country competitors. We extend this stream of research by investigating both formal protection strategies (e.g. patenting) as well as strategic ones (secrecy, lead time, complex design). We conceptualize the breadth of firm's knowledge protection strategies and relate it to the particular situation of MNC subsidiaries. Moreover, we argue that their approaches differ with regard to host country challenges and opportunities. We address these issues empirically, based on a harmonized survey of innovation activities of more than 1800 firms located in Portugal and Germany. We find evidence that MNCs prefer broader sets of knowledge protection strategies in a host country with fewer opportunities for knowledge sourcing (Portugal). In Germany, though, they opt for narrower sets of knowledge protection strategies if they invest in innovation activities themselves. We deduce that these results are due to a need for reciprocity in knowledge exchanges to benefit fully from promising host country knowledge flows.
Original languageEnglish
Pages (from-to)956-968
JournalResearch Policy: A Journal devoted to Research Policy, Research Management and Planning
Volume39
Issue number7
Publication statusPublished - 2010

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Industry
Innovation
Knowledge protection
Cross-country comparison
Multinational firms
Multinational companies
Host country
Innovation activities
Germany
Subsidiaries
Portugal
Patenting
Secrecy
Competitors
Knowledge exchange
Knowledge sourcing
Knowledge flow
Knowledge spillovers
Knowledge sharing
Lead time

Cite this

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title = "Knowledge protection strategies of multinational firms: A cross-country comparison",
abstract = "International knowledge spillovers, especially through multinational companies (MNCs), have recently been a major topic of discussion among academics and practitioners. Most research in this field focuses on knowledge sharing activities of MNC subsidiaries. Relatively little is known about their capabilities for protecting valuable knowledge from spilling over to host country competitors. We extend this stream of research by investigating both formal protection strategies (e.g. patenting) as well as strategic ones (secrecy, lead time, complex design). We conceptualize the breadth of firm's knowledge protection strategies and relate it to the particular situation of MNC subsidiaries. Moreover, we argue that their approaches differ with regard to host country challenges and opportunities. We address these issues empirically, based on a harmonized survey of innovation activities of more than 1800 firms located in Portugal and Germany. We find evidence that MNCs prefer broader sets of knowledge protection strategies in a host country with fewer opportunities for knowledge sourcing (Portugal). In Germany, though, they opt for narrower sets of knowledge protection strategies if they invest in innovation activities themselves. We deduce that these results are due to a need for reciprocity in knowledge exchanges to benefit fully from promising host country knowledge flows.",
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Knowledge protection strategies of multinational firms : A cross-country comparison. / de Faria, P.; Sofka, W.E.J.

In: Research Policy: A Journal devoted to Research Policy, Research Management and Planning, Vol. 39, No. 7, 2010, p. 956-968.

Research output: Contribution to journalArticleScientificpeer-review

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