Template-Type: ReDIF-Paper 1.0
Author-Name: Manuel Portugal Ferreira
Author-Email: manuel.portugal.ferreira@gmail.com
Author-Workplace-Name: Instituto Politécnico de Leiria
Author-Name: Fernando Ribeiro Serra
Author-Email: fernandoars@uninove.br
Author-Workplace-Name: Uninove – Universidade Nove de Julho
Author-Name: Emerson Maccari
Author-Email: emersonmaccari@gmail.com
Author-Workplace-Name: Uninove – Universidade Nove de Julho
Title: When the innovator fails to capture rents from innovation
Abstract: Innovating firms face the dilemma of knowing when they will be able to appropriate the rents accruing from their innovations. Only the future value of the rents creates an incentive to innovate, and all innovations that are either imitated or improved upon by competitors preempt the innovator firms from capturing their rents. In this conceptual paper, we observe boundary conditions under which protection guarantees appropriation. A paradox emerges in that innovators benefit from networking and bandwagon effects but not from total diffusion of the knowledge. While networks are excellent vehicles for innovation, the business and social ties connecting firms deepen the hazards associated to the appropriation of rents.
Creation-Date: 2013-09-29
File-URL: https://globadvantage.ipleiria.pt/files/2012/08/Working_paper-101_globadvantage.pdf
File-Format: application/pdf
Number: 101
Classification-JEL: M0, M1
Keywords: innovation, innovation rent, network ties, diffusion of knowledge, bandwagon effects, complementary assets
Handle: RePEc:pil:wpaper:101