Threat Of Imitation Research Articles

Pioneering orientation and the threat of imitation in tourism and hospitality firms: the role of knowledge strategy

ABSTRACT This paper focuses on the moderating role of knowledge strategy between threat of imitation and pioneering orientation (PO) in tourism and hospitality firms (THFs) located in cultural destinations. First, it studies the moderation of knowledge exploitation strategy and knowledge exploration strategy separately. Second, it analyzes the moderating effect of combined knowledge strategy, which includes exploitation and exploration. The sample consists of 215 THFs located in World Heritage Cities (WHCs) in Spain. The results show divergent moderating roles. While knowledge exploitation strategy positively moderates the relationship between the threat of imitation and PO, the moderating effect of knowledge exploration strategy is negative. Moreover, combined knowledge strategy also moderates the relationship between threat of imitation and PO. This study contributes to the empirical literature by analyzing different knowledge strategies and highlighting the need for simultaneous consideration of exploitation and exploration of knowledge in THFs located in tourism destinations.

Competition-Driven Repositioning Through Knowledge Search: Evidence from Mobile App Developers

Strategic repositioning is core for firms to gain and maintain competitive advantage in changing competitive environments. Adopting an adjustment costs and benefits framework, we propose that firms can strategically reposition in the knowledge space through knowledge search to address the threat of imitation-driven competition, extending the repositioning literature in the product and geographical markets. Using a quasi-natural experiment design based on the jailbreak of iOS 7 and app developers’ knowledge search activities on Stack Overflow, we find causal evidence that iOS app developers engage in specialized knowledge search in response to the threat of imitation introduced by pirated applications. In addition, iOS app developers with high knowledge complexity and unique knowledge will further increase their knowledge specialization after the jailbreak.

Imperfect patent protection, licensing, and willingness to pay for the innovation

This article analyzes the ways in which imperfect patent protection affects patent holders’ licensing decisions, firms’ willingness to pay for the innovation, and social welfare. We consider a cost-reducing innovation by either an incumbent or a (potential) entrant. According to our analysis, when patent protection is high enough, the entrant is willing to pay more compared with the incumbent, it licenses the innovation exclusively, and it acts as a non-practicing entity. In the case of low patent protection, the threat of imitation discourages licensing agreements, and consequently, the incumbent ends up investing more. Thus, the level of patent protection impacts the structure of the market, affecting R&D appropriability and social welfare.

Intellectual Property Rights and the Margins of Firm Imports in China

ABSTRACTWe have analyzed the channels through which intellectual property rights (IPRs) affect firms’ imports, combined Chinese Customs Database with the Annual Survey of Industrial Firms, and then empirically analyzed the effects of IPRs protection on firms’ total imports and margins of imports. We have found that strengthening IPRs protection by raising the product extensive margin significantly increases the import value of Chinese industrial firms. IPRs protection has a larger promoting effect on the import value in areas with a stronger threat of imitation; when a firm’s innovation activity becomes more active, IPRs will have a lower promoting effect on the import value.

Explaining the Current Innovative R&D Outsourcing to Developing Countries

While multinational firms from developed countries have used researchers from emerging areas to assist in the adaption of an existing product, few multinational firms have carried out innovative R&D, or R&D for the creation of a new product, in these areas. Using the threat of imitation and wage differences of researchers across regions, this study proposes a partial equilibrium model to explain the lack of innovative R&D in developing countries. I build a North-South model examining a single firm’s choice of research locations. The model predicts that weak IPR-protection in developing countries does not necessarily explain the lack of Southern research. In some situations, reduced IPR-protection can even increase Southern research. Harsh competition resulting from information leaks coupled with weak IPR-protection can explain much of the lack of innovative research investment in the developing world. My model also predicts that firms with low research needs, or firms in low-tech industries, locate their R&D in the North. Firms with medium research need locate in both countries while the firms with the largest research needs, or firms in high-tech industries, locate research in just the South.

Multimarket Contact and Rivalry over Knowledge‐based Resources

Research summary: Research shows that multimarket contact (MMC) reduces rivalry involving downstream activities. Yet, studies showing that MMC can increase the threat of imitation suggest a need to better understand how MMC affects upstream rivalry over knowledge‐based resources. In this study, we argue that MMC increases rivalry over knowledge‐based resources since the deterrent threat of retaliation that typically leads to mutual forbearance in downstream activities will not be sufficient to restrain firms from protecting their knowledge from imitation in upstream activities. In support of these arguments we find that MMC increases the likelihood that a firm initiates patent litigation against a rival. This study suggests the relationship between MMC and rivalry may depend on the competitive domain and the type of resources over which firms are competing.Managerial Summary: How does market overlap or MMC affect rivalry between two competitors? Prior studies have largely found that an increase in market overlap decreases rivalry in less knowledge‐intensive context because of the deterrent threat of retaliation. However, in this paper, we argue that an increase in market overlap may not reduce rivalry in more knowledge‐intensive context because of heterogeneity in capabilities to protect knowledge. We find that a firm is more likely to initiate patent litigation against a rival as market overlap increases. Our findings suggest that the incentive to protect value across multiple product markets may surpass the motivation to cooperate with rivals and that managers should have a more nuanced view of how market overlap with competitors affects rivalry in more knowledge‐intensive contexts. Copyright © 2017 John Wiley & Sons, Ltd.

Eco-innovation with opportunity of licensing and threat of imitation

We consider the product and process innovation effort decisions a sustainable (eco) manufacturer (innovator/leader) makes in the presence of a traditional manufacturer (imitator/follower) who may procure a license or imitate innovation. While product development can be easily protected by patenting and licensing, process innovation is more difficult to protect. We find that the ignoring the potential of process imitation reduces profits for the innovating firm as the follower favors all-or-nothing imitation and many equilibrium strategies, from the leader's perspective, are to deter copycatting behavior. We also show the eco-innovator may lose its competitive advantage through licensing its product innovation; moreover, licensing may result in more imitation. Lastly, we glean further insights by characterizing the equilibrium strategies with respect to cost-related factors.

Capital Goods Export to Developing Economies: Implication from Exporter’s Level of Technology and Destination Country’s Threat of Imitation

Bermula dengan episod belanjawan defisit yang berpanjangan sejak tahun 1998 di NSM, menunjukkan kutipan hasil cukai kerajaan tidak berupaya untuk menampung perbelanjaan yang menyebabkan kerajaan perlu memikirkan sumber pembiayaan alternatif seperti melalui terbitan bon. Mengikut teori dana boleh pinjam, terbitan bon kerajaan menyebabkan penurunan harga bon dan seterusnya cenderung meningkatkan kadar bunga pasaran. Kenaikan kadar bunga pasaran menyebabkan kos dana meningkat yang menyebabkan firma cenderung mengecilkan saiz pelaburan. Ini menyebabkan peningkatan perbelanjaan kerajaan yang dibiayai melalui terbitan bon tidak dapat memberikan kesan sepenuhnya kepada peningkatan pendapatan negara malahan mewujudkan kesan asakan keluar ke atas pelaburan swasta. Kertas ini bertujuan untuk mengkaji keberkesanan dasar fiskal iaitu kejutan positif perbelanjaan kerajaan dan hasil kerajaan (cukai) terhadap pelaburan swasta di Malaysia. Kajian ini menggunakan model SVAR (Structural Vector Autoregressive) dalam ekonomi terbuka bersaiz kecil untuk mengenal pasti tindak balas dinamik kejutan dasar fiskal terhadap pelaburan swasta. Data kajian adalah data siri masa sukuan bagi tempoh 1991:1-2016:3. Analisis fungsi tindak balas impulse dan penguraian varian telah digunakan untuk mengupas keberkesanan dasar fiskal terhadap perbelanjaan swasta. Hasil kajian menunjukkan kesan kejutan perbelanjaan kerajaan mewujudkan kesan asakan keluar terhadap pelaburan swasta manakala bagi penggunaan swasta mengalami kesan positif. Bagi kesan kejutan hasil cukai kerajaan menunjukkan keputusan yang sama iaitu pelaburan swasta mengalami kesan negatif manakala penggunaan swasta mengalami kesan positif.

Effects of IP Protection on Export of Knowledge-Intensive Business Services US and EU Evidence.

We investigate the impact of intellectual property protection on exports of services (with a special attention to knowledge-intensive business services) from the US to the EU (27 countries) and rest of the world (36 countries) in 2000-2010. We separately assessed EU member countries because the EU and the US are currently negotiating the TTIP agreement leading to the creation of the largest free trade area. EU15 and US altogether account for about two thirds of global KIBS exports, which makes them the most important players in international turnover in these services.We construct a gravity model of bilateral trade flows that includes standard dependent variables, measuring the “economic masses” of countries and economic distance between them. In our model we built a specific variable: the threat of imitation. It is a dummy variable expressing the level of IPR protection (measured by Ginarte and Park Index) and imitation abilities (with human capital index as a proxy) in the importing country. We investigate empirically the occurrence of market size effects (Maskus, Penubarti 1995), as the theory does not provide definite answer whether more stringent IP regulations increase or decrease trade.

Do the Intellectual Property Rights of Importers Matter for Promoting Australian Exports?

AbstractThis article provides the first empirical evidence on the effects of intellectual property rights (IPRs) and threat of imitation on Australia's export flows. Using data from all of Australia's trading partners over the period 1995–2010, an augmented gravity model is estimated in the context of an unbalanced panel. The empirical findings show that level of IPRs of importing countries and threat of imitation posed by the importing countries is both sensitive to Australian bilateral trade flows. These results therefore support the widely accepted positive nexus between the importance of IPRs and bilateral trade flows.

Entrepreneurial orientation and the threat of imitation: The influence of upstream and downstream capabilities

This paper uncovers the complexity between Entrepreneurial Orientation (EO) and performance. The paper explores the effect of the threat of imitation, which is a key external factor to explain competitive dynamics, and hence highlights effectiveness of EO. Also the paper accounts for the role of upstream (technical) and downstream (marketing) capabilities as they influence effectiveness of EO. Our results show that, under threat of imitation, downstream marketing capabilities facilitate taping into opportunities derived from EO, which positively affects performance. Conversely, available upstream technical capabilities do not aim at EO when imitation threats exist in the environment. Of importance is that we question the complexity between EO and performance can be better understood using a configurational approach.

Features and Effects of Intellectual Property Rights in Internationalization

Intangible assets facilitate successful international growth and, likewise, new value can be created through internationalization as it supports creating and utilizing such assets. Independent of whether the innovative creations are input or output, in order to preserve the benefits, awareness of the threat of imitation is needed. Departing from prior studies concentrating on patenting and copy-prevention, or taking the relationship between intellectual property right (IPR) protection and internationalization as given premises, this study addresses the features and effects of IPRs in internationalization from a more strategic perspective. Analysis of data from 299 companies provides empirical evidence.

How Open is Too Open? The ‘Dark Side’ of Openness Along the Innovation Value Chain

In this article, we provide first insights on how open innovation is connected to the imitation of intellectual property (IP). Analyzing survey data concerning the open innovation orientation along the innovation value chain of 3956 German firms, we show that companies engaged in open innovation are more exposed to imitation. The breadth and depth of open innovation activities both positively contribute to the likelihood of imitation. Further, we analyze imitation along the different phases of the innovation value chain. Our results show that every innovation phase positively influences imitation with the exception of the testing and marketing phase. Moreover, we find that all potential open innovation partner types expose the risk of imitation with the exception of competitors, which is a surprising result. We suggest that companies should consciously decide for an open innovation strategy which does not reveal their core competencies neither to competitors nor to partners which may eventually turn into competitors by vertical diversification (e.g., customers or suppliers). A conscious decision for the partner types in the various open innovation phases is a crucial strategic step to obtain the benefits of open innovation while mitigating the threat of imitation.

A Simple Model of Quality Heterogeneity and International Trade

This paper develops a trade model with firm-specific quality heterogeneity in markets where firms face the threat of imitation and engage in limit-pricing strategies. The model generates an endogenous distribution of prices and markups. Firms producing high-quality (high-price) products export, whereas firms producing lower-quality (lower-price) products serve the domestic market in accordance to the Alchian and Allen (1964) conjecture. Trade liberalization raises the average domestic markup and increases the number of products consumed in each country. However, the impact of trade liberalization on the average export markup depends on the nature of that liberalization: an increase in the number of trading countries raises the average export markup; a reduction in foreign market entry costs reduces the average export markup; and a reduction in per-unit trade costs has an ambiguous effect on the average export markup. Although the presence of markups renders the laissez-faire equilibrium suboptimal, trade liberalization increases national and global welfare.

A simple model of quality heterogeneity and international trade

This paper develops a trade model with firm-specific quality heterogeneity in markets where firms face the threat of imitation and engage in limit-pricing strategies. Firms producing high-quality (high-price) products export, whereas firms producing lower-quality (lower-price) products serve the domestic market. Trade liberalization raises the average domestic markup and increases the number of products consumed in each country. However, the impact of trade liberalization on the average export markup depends on the nature of liberalization. Although the presence of markups renders the laissez-faire equilibrium suboptimal, trade liberalization increases national and global welfare.

Appropriability Mechanisms and the Platform Partnership Decision: Evidence from Enterprise Software

We examine whether ownership of intellectual property rights (IPR) or downstream capabilities is effective in encouraging entry into markets complementary to a proprietary platform by preventing the platform owner from expropriating rents from start-ups. We study this question in the context of the software industry, an environment where evidence of the efficacy of IPR as a mechanism to appropriate the returns from innovation has been mixed. Entry, in our context, is measured by an independent software vendor's (ISV's) decision to become certified by a platform owner and produce applications compatible with the platform. We find that ISVs with a greater stock of formal IPR (such as patents and copyrights), and those with stronger downstream capabilities (as measured by trademarks and consulting services) are more likely to join the platform, suggesting that these mechanisms are effective in protecting ISVs from the threat of expropriation. We also find that the effects of IPR on the likelihood of partnership are greater when an ISV has weak downstream capabilities or when the threat of imitation is greater, such as when the markets served by the ISV are growing quickly.This paper was accepted by Gérard P. Cachon, information systems.

Intellectual Property Rights, Institutional Quality and Economic Growth

We consider the role of intellectual property rights (IPRs) in a Schumpeterian growth model in which patent holders face the threats of profit loss due to imitation and complete replacement due to successful outside innovation. In this setting stronger IPR enforcement has both imitation and innovating deterring effects. We disaggregate IPR policies by distinguishing between two features of IPRs protection. The first is the intensity of IPR enforcement, which is determined by the fraction of resources allocated to innovation and imitation deterrence. The second is the quality of the IPR regime, which reflects the ability of the IPR regime to shift enforcement resources away from innovation deterrence and towards imitation deterrence. We find that an increase in the quality of the IPR regime unambiguously promotes growth. However, an increase in the intensity of IPR enforcement increases growth if and only if the threat of imitation is above a threshold level. We show that there exists a growth-maximizing level of IPR enforcement intensity, which is decreasing in institutional quality. We also show that countries with sufficiently low quality institutions will be trapped in a no-growth boundary equilibrium, regardless of the intensity of IPR enforcement. Simulation exercises indicate that welfare-maximizing policies follow patterns similar to growth-maximization policies. The economy can have too much or too little IPR enforcement intensity. For countries with sufficiently low institutional quality, welfare is maximized by completely foregoing IPR protection and eliminating monopolistic markets, even though positive growth may be feasible with appropriate intensity of IPR enforcement.

Export discoveries, diversification and barriers to entry

The literature on the relationship between economic diversification and development established that diversification rises with development up to a point. Some have argued that market failures reduce private investments that are necessary to find out whether a new product can be exported profitably, thus implying that the threat of entry can reduce export discoveries and consequently hamper diversification. In parallel, the trade literature on the “extensive margin” of trade has focused on the role of fixed costs of exporting, which affects the number and types of firms that enter into exporting activities. This article presents data suggesting that export diversification and export discoveries are correlated over the course of development, and it provides an empirical test of market failures that might deter export discoveries. The findings suggest that the threat of entry by imitators reduces the number of export discoveries within countries and industries for a given rate of growth of non-discovery exports. However, this market-failure effect is less pronounced when allowing for inter-industry spillovers, whereby export discoveries in one industry lead to discoveries in another industry. The policy implication is that barriers to entry should not be used to protect innovators from the threat of imitation, but governments could consider interventions that directly focus on stimulating export discoveries.

The use of intellectual property protection by micro, small, and medium-scale enterprises: a case study of Ghana

Micro, small and medium enterprises (MSMEs) form the backbone of most national economies and are often the driving force behind innovation. Intellectual property (IP) rights provide legal protection for MSMEs against unauthorised exploitation of their innovations by others. As part of Ghana’s trade policy reforms, Ghana and Switzerland recently signed an agreement to strengthen IP rights administration in Ghana, in order, inter alia, to improve the business environment and encourage innovation. However, little research exists on the use of IP protection by businesses, especially MSMEs, in developing countries such as Ghana. Will a strengthened IP regime benefit MSMEs? Using qualitative procedures, this study examines the use of IP, especially trademarks and industrial designs by MSMEs in Ghana. The evidence indicates that MSMEs do not use formal IP protection as a competitive strategy, and adapt to the threat of imitation by using informal methods such as trade secrets, maintaining product quality, and constant innovation. The study concludes that promoting IP as a tool for enhancing MSME competitiveness requires an integrated approach involving awareness creation on the benefits of IP, increasing MSME access to appropriate and affordable IP services and ensuring effective enforcement of IP rights together with promotion of other competitive strategies such as improving product quality and customer service, protection of cultural artefacts and promotion of national trademarks.

Intellectual property rights protection and the surge in FDI in China

There is scarcity of empirical studies focusing on the role of intellectual property rights (IPR) in attracting FDI into developing nations, especially large economies with relatively strong threat of imitation. This paper examines the contribution of IPR to the recent surge in China’s inward FDI. We consider two alternative measures of IPR and explore the possibility that the effect of IPR protection on FDI may vary by the level of economic development. Using a panel data for 38 countries, the empirical results indicate that the strengthening of IPR protection in China has a positive and significant effect on FDI. The results also show that FDI from Hong Kong and Taiwan behaves differently from the FDI originating from other high-income countries.