How formal and informal intellectual property protection matters for firms' decision to engage in coopetition: The role of environmental dynamism and competition intensity

Abstract

Firms engage in coopetition by collaborating with their direct competitors. We examine how reliance on protection mechanisms to safeguard intellectual property (IP) affects a firm's decision to engage in coopetition. In addition, we study how industry dynamism and competitive intensity moderate this relationship. Using a generalized structural equation model (GSEM), we find that firms are more likely to collaborate with rivals when their IP is protected. Firms employing formal protection mechanisms are more likely to engage in coopetition if they operate in a dynamic industry and they are less prone to engage in coopetition when using informal protection mechanisms in dynamic and competitive industries. We conjecture that this latter finding signals that firms employing informal mechanisms in such environments are more likely to prevent knowledge spillovers to a competitor by avoiding them as partnership candidates.