Coopetition, formal and informal appropriation mechanisms and the role of environmental dynamism and competition intensity

This paper studies how firms’ use of formal and informal appropriation mechanisms influences their propensity to engage in collaboration with competitors, also referred to in the literature as coopetition. Patents, trademarks, copyrights, and design rights are formal appropriation mechanisms. Secrecy, lead-time, and complexity are examples of informal appropriation mechanisms. The empirical analysis relies on a structural equation model which is estimated on a sample of innovating firms that operate in a large number of industries in the Netherlands in 1998/2000 and 2010/2012. The findings reveal the following pattern of results: firms’ reliance on formal appropriation mechanisms has a positive association with propensity to engage in coopetition, while past engagement in coopetition has a positive association with the subsequent use of informal appropriation mechanisms. External environments, characterized by different levels of industry competition intensity and dynamism, moderate the association between the use of appropriation mechanisms and coopetition. In dynamic industries, firms are more prone to engage in coopetition when using formal IP protection. The reliance on informal appropriation mechanisms, however, negatively affects the likelihood of coopetition. In industries characterized by strong competitive pressures, firms relying on informal appropriation mechanisms have a lower propensity to engage in coopetition. The analysis in this paper contributes to the coopetition literature by advancing our understanding of the link between competitor collaboration and firms’ use of formal and informal appropriation mechanisms (225 words).