Informal and formal open activities: Innovation protection methods as antecedents and innovation outputs as consequences

Firms' open strategies are tied to their innovation protection mechanisms. Extant theoretical and empirical research provides valuable insights, which generally conclude that stronger intellectual property protection is likely to be associated with increased openness. However, current research still has a limited understanding of the relationship between the choice of protection mechanisms and the mode of openness. We propose that firms adopt different modes of open activities when they choose corresponding effective protection mechanisms. We further investigate how these open activities affect innovation output and whether the impact of open activities on innovation output is contingent on innovation types. The empirical results from 1,202 firms in the IRC Open Innovation Survey show that firms pursue formal open activities when they incorporate legal methods to protect innovation. In contrast, firms pursue informal open activities when they incorporate strategic methods to protect innovation. We further find that formal open activities favor incremental innovation, while informal open activities favor radical one.

Automated summary

Firms tend to adopt different modes of open activities depending on their choice of effective protection mechanisms. Research shows that formal open activities are favored for incremental innovation when legal methods are used to protect innovation, while informal open activities are favored for radical innovation when strategic methods are used for protection. The impact of open activities on innovation output may vary depending on the innovation types.