Academic journal article Journal of Global Business and Technology


Academic journal article Journal of Global Business and Technology


Article excerpt

Recent literature shows that internationalization and innovation are linked to each other to an increasing extent. These tight connections and critical factors in this setting warrant more research. As internationalization, radical innovation, and protection issues have not been systematically researched in the same setting, there is a need for more research that would examine the interplay of types of radical innovation and innovation protection in international context.

The first paper by Pia Hurmelinna-Laukkanen, Paavo Ritala and Liisa-Maija Sainio addresses this gap in the extant research and examine how different types of radical innovation can be effectively protected against imitation in firms operating in domestic and international markets with a set of protection mechanisms. In exploring this issue, the authors focus on three types of radical innovations, i.e., technology, market, and business-model innovations, and seven different types of protection and innovation appropriation mechanisms, i.e., intellectual property rights (IPRs), contracts, employment legislation, human resource management (HRM), secrecy, lead time, and tacitness of knowledge. Hurmelinna-Laukkanen, Ritala and Sainio start their examination with theoretical discussion on international innovation environment. Following this, they move on to explore empirically the strength of different appropriability mechanisms in firms that operate in domestic and international markets.

In their theoretical discussion highlighting the relationships between internationalization, type of innovations and appropriability mechanisms they arrive to three hypotheses formulated as follows:

Hj: Internationalized firms reach higher levels of innovation radicalness than domestic firms.

H2: Internationalized firms reach higher strength of appropriability mechanisms than domestic firms.

H3: Both internationalized and domestic focused firms reach higher levels of innovation radicalness when the appropriability mechanisms are stronger.

The results based on literature review and empirical examination of data from 209 firms indicate that while protection mechanisms are typically stronger in internationalized firms than in domestic ones, there are differences with regard to the individual mechanisms that protect different types of innovations in both types of markets.

The findings concerning the relationship between internationalization and dimensions of innovation radicalness indicate that in international markets, access to different types of knowledge and varying technologies enhances the chances that radically new technologies emerge. Regarding market radicalness, internationalization does not seem to play a role, since this dimension is almost unchanged independent of domestic or international focus. In terms of business model radicalness, the internationalized firms seem to exhibit higher rates of newness. This result suggests that internationalized firms approach the business models differently or that international markets are utilized for trials and new operation modes, which increases the radicalness of business models for such firms. Second, they considered the linkages between internationalization and protection/appropriability mechanisms. They found that four out of seven mechanisms - IPR's, secrecy, tacitness and contracts - were clearly stronger in internationalized firms and that also the rest followed this pattern.

Third, the study illustrates notable differences between internationalized and domestic firms in terms of the combinations of different types of radical innovations and the strength of protection. In general, it seems that in domestic markets, the informal mechanisms dominate the appropriability regime over formal ones, while in international markets the variety is higher. There are differences regarding the strength of different mechanisms and dimensions of radical innovations in different markets, however. …

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