Three essays on open innovation and markets for technology

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This thesis comprises three empirical studies examining topics in the field of innovation and technology management. These topics broadly concern firms’ practices of open innovation and their engagement in markets for technology. The first two chapters of the dissertation (co-authored with Said Matr) focus on the outbound type of open innovation, in a setting, where the firm makes its knowledge (or part of it) for free to the outside parties, and investigate its implications for the focal firm and the industry, respectively. More specifically, in the first chapter, we propose two channels, through which a firm can potentially capitalize on a decision of adopting an outbound open approach in its intellectual property (IP) strategy for no direct financial benefits in return. The first channel involves selling subsequent intellectual assets for the focal firm in markets for technology to meet the demand resulting from the increased engagement of third parties in the liberated knowledge. The second one refers to bringing the subsequent external knowledge in-house via buying intellectual assets or building upon it internally. We capture the variation in IBM’s IP strategy toward more openness, using the decision of IBM to pledge 500 of its patents to the public in 2005. The results from implementing a difference-in-differences approach between 1999 and 2010 provide support for the proposed mechanisms. The second chapter investigates the knowledge-domain-level consequences of a firm-level decision to open up its IP strategy, in terms of the amount and type of the innovations subsequently created, market structure characteristics, as well as trading activities in markets for technology. The results from a difference-in-differences analysis of the impact of IBM’s patent pledge of 2005 show that more patents and more radical patents are created, more entities (but not new-to-the- field entities) file for patents, and more patent trades take place in the opened-up industries due to strategic openness. Our findings provide an empirical insight on the phenomenon of inside-out open innovation and improve our understanding with regard to its proclivity towards innovation advancement and innovation management at a broader level than the firm. Overall, among other contributions, these chapters establish a link between outbound openness and markets for technology at different levels of analysis. Finally, the third chapter (co-authored with Eduardo Melero and Kurt Desender) addresses the question of what mechanisms may help mitigate firms’ underutilization of external knowledge incorporation, and connects the literatures on markets for technology with the one on corporate governance to propose an answer. In particular, we focus on the widespread not-invented-here (NIH) syndrome, defined as a negative attitude toward outside knowledge that prevents organizations from absorbing external knowledge to generate further innovations, and argue that corporate-level actions can play an important role in neutralizing it. Accordingly, we examine the role of independent members of boards of directors, given their monitoring and advisory functions. We hypothesize and show that a higher presence of independent directors increases the probability of acquiring external knowledge in markets for technology, and that this relationship is particularly intense in settings where the NIH syndrome is more likely to be present. Furthermore, the effect is expected to be weaker when the CEO is in a strong position of power. Overall, our results confirm these hypotheses, suggesting that independent directors in corporate boards favor the incorporation of outside knowledge and help overcoming the NIH syndrome.
Mención Internacional en el título de doctor
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