On the contingent value of knowledge base for radical innovation capability

Abstract

PurposeThis paper aims to explore how to build firm’s radical innovation capability from its own knowledge resources. It proposes the impact of knowledge base on radical innovation and outlines why and how appropriability regimes are important throughout the radical innovation capability development process.Design/methodology/approachQuestionnaire and in-depth interviews were used to empirically test the relationship between knowledge base, appropriability regimes and radical innovation capability. To correct for potential endogeneity, a two-stage regression model was used to test the interaction effectsFindingsBy examining 237 firms involved in R&D activities in high-tech manufacturing firms in China, this paper finds that when a firm have a deep knowledge base, strategic appropriability regime may reduce concerns about problems such as knowledge leakage and innovation appropriation associated with deep knowledge bases. In contrast, legal appropriability regime will also tend to strengthen the positive effect of knowledge breadth on radical innovation capability.Research limitations/implicationsIn this study, self-reported measures are used because of their potential for concept specific accuracy; future research might wish to replicate our model and test it with objective data.Practical implicationsThe paper includes implications for the fit between the existing internal knowledge base and the way a firm appropriates from its knowledge, and provides entrepreneurs and managers with direct implications about how to manage knowledge resources for radical innovation capability development.Originality/valueThis paper provides a more nuanced understanding of how knowledge base and value appropriability mechanisms jointly affect radical innovation capability development.