Nourishing Your Obscurity: Sourcing Competitors’ Knowledge, Market-expansion Intent and Firm Innovation

Abstract

Despite increasing research attention given to sourcing knowledge in supplier chains to develop new products and processes, few studies have examined whether and when a firm can source competitors’ knowledge to innovate. In a competitive context, high levels of knowledge sourcing can be perceived by competitors as a threat, especially when the firm has greater intent to expand its market shares. Nevertheless, having no or weak market-expansion intent may hinder a firm from effectively practicing knowledge sourcing. We draw upon an absorptive capacity view and competitive dynamics perspective and offer a contingent view of the sourcing of competitors’ knowledge (SCK). Using a panel dataset of Spanish manufacturing and service firms from 2006–2016, we find that a decreasingly positive relationship exists between SCK and firm innovation, and that market-expansion intent (MEI) positively moderates this relationship. Moreover, we find that the greatest innovation return is achieved at the confluence of middle levels of SCK and high levels of MEI. Our findings suggest that managers practicing SCK to innovate should be cautious about its costs and appropriately adapt the use to their MEI.