INNOVATION PERFORMANCE IN THE SHADOW OF EXPROPRIABILITY — INTERPLAY OF THE APPROPRIABILITY REGIME AND COMPETITORS' ABSORPTIVE CAPACITY

Expropriability is the ability of (potential) competitors to extract information about innovation and utilize it to their advantage in a manner that decreases the competitive advantages of the original innovator. It has an effect on the profit margins and, subsequently, on the strategic behavior of a firm in terms of innovation activities. In this study, the relationship of appropriability and expropriability is clarified, and empirical evidence from 299 companies is provided to increase understanding of the strategic protection of intellectual assets. The results indicate that industries differ in terms of expropriability and that innovation performance depends on the level of expropriability.