Internal Network Structure and the Speed of Generative Appropriability

Strategy & Business Policy

Speaker: Brian Silverman

Professor - Rotman, Toronto

Conference  Jouy-en-Josas T004

Abstract:

Strategy research has long been concerned with how firms protect and build on the technological knowledge they create, and has focused on legal enforcement, complementary assets, and location decisions. Less attention has been paid to how internal firm structures support the appropriation of future cumulative innovations: what has been termed "generative appropriability." Drawing on innovation and social network research, we propose that more connected intrafirm inventor networks facilitate generative appropriability by accelerating within-firm generation of follow-on innovations, thus pre-empting rivals. Using patent data on 1,391 large corporations over 26 years, we find that more connected internal inventor networks are associated with more and more valuable cumulative patents generated by focal firms relative to other firms. This effect is strongest in the critical first few years after an initial invention.