Can a firm find the balance between openness and secrecy? Towards a theory of an optimum level of disclosure

Abstract

The purpose of this article is not merely to counter assertions about technology leakage/spillovers being innocuous or benevolent, but to go further and illuminate an under-researched question: How can companies seek the optimum balance between conscious disclosure and secrecy? The article works towards a theory of optimum disclosure, by identifying possible benefits and costs of disclosure or openness. In Paradigm 1, most companies find the net benefits of disclosure/openness to be negative. In Paradigm 2, applicable to a few highly networked or open-source MNEs, there could be net benefits over a limited range and up to an optimum point.